Canadian Net: Solid 6.2% Yield, But Less Room For Capital Appreciation

(8min)

Summary

  • Canadian Net Real Estate Investment Trust has shown a modest increase in property rental income over the first half of 2024.
  • The current stock price of $5.60 is aligned with its NAV, but the REIT trades at a lower FFO multiple compared to US counterparts.
  • The REIT's debt structure and minimal mortgage maturities through 2026 provide a strong buffer against interest rate fluctuations.
  • The yield is pretty good considering how low the payout ratio is, but we don't anticipate much capital appreciation from here.
  • Conservative Income Portfolio members get exclusive access to our real-world portfolio. See all our investments here »

Petro-Canada logo in front of one of their gas stations in Canada. Belonging to Suncor Energy, petro Canada is a petrol station brand spread in Canada

BalkansCat

All values are in CAD. Prices refer to the TSX traded stock and not the OTC one.

We first wrote about Canadian Net Real Estate Investment Trust (NET.UN:CA) (OTC:CNNRF) about 15 months back and gave

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This article was written by

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Trapping Value is a team of analysts with over 40 years of combined experience generating options income while also focusing on capital preservation. They run the investing group Conservative Income Portfolio in partnership with Preferred Stock Trader. The investing group features two income-generating portfolios and a bond ladder.

Trapping Value provides Covered Calls, and Preferred Stock Trader covers Fixed Income. The Covered Calls Portfolio is designed to provide lower volatility income investing with a focus on capital preservation. The fixed income portfolio focuses on buying securities with high income potential and heavy undervaluation relative to comparatives. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of NET.UN:CA, SU either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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