Q: What do you think about buying this reit right now ? A nice dividend and it was a recommended buy on BNN yesterday ?
5i Research Answer:
NWH.UN has been relatively flat year-to-date but share price performance has been propped up by the very high yield it pays at 7%. It cut its distribution last year and has sold some assets to improve its balance sheet so it is in a bit of a recovery mode. Debt levels are still high, but have been coming down quite nicely over the past year. For the most recent quarter, payout ratio from Adjusted Fund Flows was 99% compared to 122% in the prior year period. We would still like to see payout ratio metrics come down here. While there is potential for a turnaround and the worst may be over in terms of unit price declines, growth is likely to continue to decline in the future and we are not overly excited yet.