Q: Good Morning
You are recommending continuously DIR.UN as one of your favorite REITs.
I have noted that this Company has not increased their dividend since 2013.
Normally, we have been advised to avoid companies that have not increased their dividends for several years.
Isn't this fact a red flag that DIR.UN should be avoided ?
Thank you as always for your insight.
You are recommending continuously DIR.UN as one of your favorite REITs.
I have noted that this Company has not increased their dividend since 2013.
Normally, we have been advised to avoid companies that have not increased their dividends for several years.
Isn't this fact a red flag that DIR.UN should be avoided ?
Thank you as always for your insight.
5i Research Answer:
It is a negative factor, yes. This has kept the payout ratio low, which is at least an offset. Payout is less than 60% now, and there is room for an increase if the REIT decides on it. The issue is also partially at least reflected in the low valuation at 11X cash flow. It is not perfect, certainly but we do like it also as a potential merger target.