Allied Properties Real Estate Investment Trust T.AP.UN

Screaming Buy - Loss of sector interest

[MyHoneyPot]

11.80% eligable dividend return? Today

This resulted in FFO and AFFO pay-out ratios(1) in the first quarter of 77.8% and 83.8%, respectively



If they reduced payout 10% the dividend return would be  10.62%
10% cut in dividend 

This resulted in FFO and AFFO pay-out ratios(1) in the first quarter of 70.2% and 75.42%, respectively



If they reduced payout 20% the dividend return would be    9.44%
20% cut in dividend

This resulted in FFO and AFFO pay-out ratios(1) in the first quarter of 62.24% and 67.04%, respectively

Way to cheap and it time management sold a property and put a buyback in place and just started reducing the share count. 

MHP
IMHO

[yieldmachine]

The only thing I want to see reduced before a dividend cut is contemplated is headcount.

[rabnud]

I saw the overall picture and bailed 2 weeks ago at a loss  52 top management employees is just too much money going out the door

[EstevanOutsider]

well i still dont' think it's overly compelling to dream office. i went thru their properties closer again. their top 3 properties (robert bourassa and the two gaspe properties in montreal) are incredibly difficult to sell in this enviornment. to like them you have to be wildly bullish on office/tech/hipster types overall they value their portfolio using 4% cap rates and over $500 per

[MyHoneyPot]

I appreciate your comments but it seems to me that with the dividend yeild 11.7% they could easily cut but they don't need to because their payout rates are reasonable.  Also if you look at the debt maturity and their current cost of debt it is very reasonable. My thinking is this, they are not feeling a compelling need to cut the dividends, and their debt ratio is really really low

[Frankie10]

Please note that the debt metric you reference relies on IFRS cap rates. Mathematically, this ratio increases as cap rates increase. There are many opinions on whether Allied's cap rates reflect a 'fair value'. I'll hold my opinion and simply leave you with the risk around the debt metric. 

[MyHoneyPot]

Its a good arguement isn't it, generally each and every person will have an opinion regarding fair value.  What i believe they should sell enough asset that would allow them to improve the NAV of the company, as the debt ratio is alreadys low 35.9 The NAV of the stock is $44.84 per unit.  So the shares are trading at 15.45/44.84 = 34.45 % of NAV 10,475 Million   3,719

[EstevanOutsider]

allied debt ratio is "low" because they using artificially low cap rates. allied did not move the cap rates like other reits so the nav is delusional.  if they normalize the cap rates relative to peers like dream office it wont look so good. just my 2 cents.