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REIT: RioCan vs. SmartCenters

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  • Jan 13th, 2021 2:32 am
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[OP]
Deal Addict
Sep 5, 2010
2330 posts
363 upvotes
Toronto

REIT: RioCan vs. SmartCenters

I did enough research comparing these two RIET giants and Just as I was to submit a buy order for RioCan for 150 shares at $17, I came across an article from December about RioCan slashing their annual distribution by one third, from 1.44 to .96!

Forget it! I am mainly buying this for its dividend payout.

So that leaves me with SmartCenters! Their dividend, while slightly lower than Rio’s current payout , it is still pretty decent at almost 8%.

I did some reading to make sure there is no pending changes to SC yield and didn’t find any. I understand this could be announced any moment. But knowing that Walmart is one of their major tenants, gives me more assurance about their situation given Covid.


Anyone here has any thoughts on this and whether it is a good move on my part to consider SmartCenters over RioCan?

P.S SmartCenters is also in my backyard and see their signs and head office daily , so there is some local bias and favouritism going on Smiling Face With Halo
Last edited by Woodbridge905 on Jan 8th, 2021 11:44 am, edited 1 time in total.
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Sep 21, 2007
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I've been wondering about this since I bought into SRU back in Nov. I bought in high 25.30.. lol. I'm probably gonna add to it eventually.. it's just so uncertain with so many lockdowns everywhere.

My question to you is, why only those two that you are choosing? If you're looking into a div play there's many better options out there imo..
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[OP]
Deal Addict
Sep 5, 2010
2330 posts
363 upvotes
Toronto
faken wrote: I've been wondering about this since I bought into SRU back in Nov. I bought in high 25.30.. lol. I'm probably gonna add to it eventually.. it's just so uncertain with so many lockdowns everywhere.

My question to you is, why only those two that you are choosing? If you're looking into a div play there's many better options out there imo..
Thank you and I did actually consider others but narrowed it down to these two based on my research.

I basically had this finalized list : 3 REIT and 3 ETFs

1-The iShares S&P/TSX Capped REIT Index ETF (XRE.TO)

2-BMO Equal Weight REITs Index ETF (ZRE.TO)

3-Vanguard FTSE Canadian Capped REIT Index ETF (VRE.TO)

4-Canadian Apartment Properties REIT (CAR.UN)

5- RioCan (REI.UN)

6- Smart Centers REIT (SRU.UN)
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Member
Oct 25, 2009
311 posts
219 upvotes
out of retail I picked sru and fcr
Sr. Member
Jun 28, 2018
891 posts
620 upvotes
Toronto
Not an expert, but look at their quarterly reports. Quick take, look at the Payout Ratio differences. It is only one aspect and there are obviously other factors, but the difference is there. Riocan was in much worse shape at that time. I assume post-cut things are much better. A matter of how occupancy and rent is coming along and will go on.

Riocan Q3 (3 mo): https://s1.q4cdn.com/847730316/files/do ... ders...pdf
FFO: 86.2%
ACFO: 97.7%

Smart Q3 (3 mo): https://www.smartcentres.com/app/upload ... Report.pdf
FFO: 72.3%
ACFO: 77.2%
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Deal Addict
Dec 4, 2011
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Montréal
dpwr wrote: out of retail I picked sru and fcr
Same here and still holding. Both have very healthy payout ratios and should make it through with distribution unscathed.

Plus in SRU case the founder has plowed in $10 million plus in share purchases since start of pandemic, usually a good sign.
Newbie
Oct 29, 2020
59 posts
84 upvotes
I like them both; All things being [relatively] equal, I decide who to put my money with based on the yield at the time. So while RioCan won a large portion of my money before, with the cut, maybe I'll switch to SmartCentres next time.
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Apr 13, 2006
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holding SRU - 300 @ 24.98 :(
held REI at one point but ditched it before the dividend cut.

once it ever goes into the green (slow and steady) i might ditch SRU as well for whatever it's worth.... i've learned that in my whole 2 months of investing that i can assume/handle a bit more risk.
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Deal Addict
Dec 4, 2011
1619 posts
1072 upvotes
Montréal
Guess I was wrong about FCR (weakest one out of all my REITs (SRU, AP and WIR are the others) to be honest. Unfortunate but unsurprising that they cut their distribution like REI. These are in my portfolio to stay anyway but could have waited in retrospect.
Last edited by admiralackbar on Jan 13th, 2021 6:44 am, edited 1 time in total.
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Jan 31, 2016
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Possibility that more will follow in the divvy cuts. Just as I was compiling my list of starting positions, the cuts are coming in.

I will have to rethink my reits recovery play position especially since I was hungry for the payouts.
Member
Nov 24, 2016
473 posts
553 upvotes
dotsandpixels wrote: Possibility that more will follow in the divvy cuts. Just as I was compiling my list of starting positions, the cuts are coming in.

I will have to rethink my reits recovery play position especially since I was hungry for the payouts.
AP increased its dividend a few months ago by 3% from what I remember. I think management was signaling that they're unlikely to even consider a cut. That said, ever since I bought a month or so ago the stock has been down 8%.

I picked AP because of their super low debt compared to other REITs I looked at.

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