Kalkine Media lists TSX REITs to watch ahead of 2023 - Kalkine Media

December 12, 2022 03:13 AM EST | By Team Kalkine Media
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Highlights:

  • Operating revenue of Canadian Apartment Properties rose over six per cent YoY in Q3 FY22.
  • The REI.UN stock jumped over 11 per cent QTD.
  • Both revenue and net income of Granite rose in Q3 FY22.

Investors are keeping close track of the Canadian real estate sector, amid the hovering concerns of inflation, soaring interest rates, and other uncertainties. Some market participants typically explore opportunities in the real-estate sector, as the companies tend to pay out regular dividends to investors.

So, let's take a quick tour of three TSX real-estate stocks, which include Canadian Apartment Properties Real Estate Investment Trust (TSX: CAR.UN), RioCan Real Estate Investment Trust (TSX: REI.UN), and Granite Real Estate Investment Trust (TSX: GRT.UN), and see how they have performed in recent months.

Canadian Apartment Properties Real Estate Investment Trust (TSX: CAR.UN)

The Toronto, Canada-based REIT firm, Canadian Apartment Properties holds a dividend yield of 3.362 per cent. The stock of the firm, which engages in acquiring and leasing residential rental properties, fell over 28 per cent YTD and around 25 per cent YoY.

The CAR.UN stock rose about two per cent QTD and was at its 52-week low of C$ 39.08 on October 19, 2022. Canadian Apartment Properties' operating revenue surged 6.7 per cent YoY to C$ 252.03 million, and its net income totaled C$ 63.15 million, against C$ 190.21 million in Q3 FY21.

RioCan Real Estate Investment Trust (TSX: REI.UN)

The retail sector-focused Canadian REIT firm, RioCan Real Estate Investment Trust had a dividend yield of 4.909 per cent. The stock of the REIT firm, which owns, develops, and manages retail-focused properties in Canada, fell about 10 per cent YTD and around five per cent YoY.

The REI.UN stock soared over 11 per cent QTD and was at its 52-week low of C$ 17.85 on September 28, 2022. RioCan Real Estate Investment Trust's revenue was C$ 305.26 million on an IFRS basis, against C$ 264.13 million in Q3 FY21.

In the latest quarter, the Canadian REIT firm's net income was C$ 3.21 million, as compared to C$ 137.61 million in the year-ago period.

Earnings highlights of Granite Real Estate Investment Trust (GRT.UN)Source: ©Kalkine Media®; © Canva Creative Studio via Canva.com

Granite Real Estate Investment Trust (TSX: GRT.UN)

The industrial sector-focused REIT firm, Granite Real Estate Investment Trust had a dividend yield of 4.075 per cent. The stock of the company, which acquires, develops, and manages the warehouse, logistics, and other related properties, fell about 28 per cent YTD and around 26 per cent YoY.

The GRT.UN stock jumped over 14 per cent QTD and was at its 52-week low of C$ 63.29 on October 11, 2022. Granite Real Estate Investment Trust's revenue soared to C$ 111.6 million in Q3 FY22, from C$ 98.3 million in Q3 FY21.

The net operating income of the Toronto-based REIT firm was C$ 94 million in the quarter, against C$ 84.5 million in Q3 FY21.

Bottom line:

Home prices fell 1.2 per cent in October, according to Canadian Real Estate Association. The slump in October marked the smallest monthly decline since May 2022.

However, given the looming market uncertainties, and recessionary concerns, investors should exercise due diligence before putting any bets into the equity market. Looking at the performance of the sector, the S&P/TSX Composite Real Estate Index fell about 20 per cent YTD, while increasing over eight per cent YoY.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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