Friday August 31, 2012
by Brian Hicks, editor The Wealth Advisory
We have a "thing" for Canadian REITs. And when you understand just how strong the Canadian economy is, you can see why we believe that any investor should have exposure to the Canadian stocks. Here's two favorites.
Canada has vast natural resources that help it sustain its economy. And its GDP has risen from $1.3 trillion to $1.7 trillion in the last three years. There's no doubt about it: Canada is further along the road to economic recovery than Uncle Sam.
Canadian REITs are at a five-year high as office vacancies have dropped to just 8.2%. Even better, office property values are expected to rise between 10% and 20% in Canada this year.
NorthWest Healthcare REIT (NWH.UN) is thriving on the thesis that an aging population (just like in the U.S.) that will live longer.
The company’s property portfolio comprises 62 buildings with nearly four million square feet of space and more than 1,300 tenants.
This makes it the largest non-governmental owner of medical properties in all of Canada. They're so big that they've been nicknamed “Canada’s Health Care Landlord.”
It has a fairly small market cap of around $500 million. The current annual dividend of $0.80 gives the REIT a respectable dividend at around 6%.
The top REIT in Canada's strong economy is Calloway REIT (CWT-UN), which trades on the Toronto exchange
Calloway continues to hit new all-time highs. Part of the reason is this company is currently issuing bonds at 4%. Another is that occupancy rates are 99%.
In its latest quarter, Calloway reported a 12% gain for revenue and a 6% gain for earnings per
Demand for new stores from existing tenants and new tenants required the addition of over 120,000 square feet of new space during the quarter and 220,000 square feet during the six-month period. With Calloway, you can expect more stock price and dividend increases.
Learn more about this financial newsletter at Brian Hicks, editor The Wealth Advisory.