Q: Hello Team,
Could you comment on the the capital appreciation prospects for this going forward?
Thank You,
Barry
Could you comment on the the capital appreciation prospects for this going forward?
Thank You,
Barry
5i Research Answer:
Because REITs, by design, pay out most of their cash flow, there is little cash left over for growth and most are relatively low growth securities. We would note that SRU's estimated cash flow per unit this year will be slightly less than it was eight years ago. Still, the stock can do well as interest rates fall and investors seek income. It is up 19% in a year and 4% YTD. It is cheap at 11X cash flow. Dividend payout ratio is 91.9%. We would consider it 'OK' for income investors but would certainly not expect big gains here.