2016-04-05 06:43 ET - In the News The Globe and Mail attempts to identify Canadian real estate investment trusts with attractive total return potential in its Tuesday edition. The Globe's Craig McGee writes in the Number Cruncher column that REITs have performed well this year -- the S&P/TSX REIT index has posted a total return of 10.7 per cent for the first three months of 2016 and has surged more than 18 per cent since the low seen on Jan. 18. In order to identify potentially attractive REITs with reasonable valuations and sustainable payouts, Mr. McGee and his colleague Lawrence Ullman looked for REITs above $200-million in market cap with the best combination of: distribution yield; price-to-FFO (funds from operations) ratio; three-month consensus FFO estimate revision (cannot be negative); 12-month total return (cannot be negative); payout ratios (distributions as a percentage of estimated FFO) were limited to no more than 75 per cent. Mr. McGee's screen generated a fairly diverse group of six names within the REIT sector. They are Killam Apartment REIT, Agellan Commercial REIT, Milestone Apartments REIT, Morguard North American Residential REIT, Choice Properties REIT and Pure Industrial REIT.
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