Matt Smith from the Motley Fool recommends SOT.UN
Posted yesterday:
"A REIT that has struggled to deliver value for some time is Slate Office REIT. Even after slashing its distribution earlier this year, it is yielding a juicy 6%. Its second-quarter 2019 results demonstrate that Slate Office’s strategy to re-position its business and unlock value is finally taking effect. The REIT’s NOI grew by 1.6% year over year, AFFO expanded by 4%, and net income soared by an impressive 61%.
Importantly, the distribution has a conservative forward payout ratio, after the cut earlier this year, of 62%, indicating that it is clearly sustainable.
Slate Office is trading at a 27% discount to its NAV of $8.53 per unit, underscoring that it is deeply undervalued by the market, making now the time to buy. The market’s failure to recognize Slate Office’s indicative fair value is a reason that management have embarked upon a unit buyback as part of the strategy to deliver value. By the end of the second quarter, Slate had bought and cancelled 2.1 million of its units, and this will continue until 10% of the REIT’s total float has been purchased, which will help to boost the market value."