New Purchase Canadian Apartment Properties REIT

Welcome everyone to my latest post in which I reveal my latest stock purchase. Back on Nov 20th I purchased Canadian Apartment Properties REIT (Ticker: CAR.UN) this was my second purchase I made from the funds I received from selling Boardwalk REIT. What I did was I replaced one REIT with two better REITs.

What is Canadian Apartment REIT?

Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) is a Canada-based open-ended real estate investment trust. CAPREIT’s investment objectives are to provide unitholders with long-term, monthly cash distributions; grow normalized funds from operations (NFFO), distributions and Unit value through the management of its properties, acquisitions and financial management, and reinvest capital within the property portfolio. CAPREIT owns and operates a portfolio of multi-unit residential rental properties, including apartments, townhomes and manufactured home communities (MHC) located in and near urban centers in Canada. CAPREIT owns interests in approximately 46,790 residential units, consisting of over 40,501 residential suites and approximately 30 MHC’s, consisting of approximately 6,290 land lease sites. CAPREIT owns leasehold interests in approximately 15 properties located in the Greater Toronto Area. The leases mature between 2033 and 2037.

Source (RBC Direct Investing)

Revenues

The company has gone through some impressive growth over the last few years as you can see. Between 2010 and 2016 they have been able to increase their revenue from just $333.5 million to $596 million per year.

Occupancy

Canadian Apartment Properties REIT as you can see has enjoyed a very high occupancy percentage. In the last seven years the lowest has been 97.5% quite impressive. Just to let you know the 2017 number is only as of Sept 30th.

Dividends

The dividend has been on the rise over the last several years. The stock pays a monthly dividend of $0.10667 per unit. Or $1.28 on an annualized basis.

Funds From Operations Payout Ratio

Usually when companies raise their dividend their payout ratio goes up, but as you can see Canadian Apartment Properties REIT’s ratio has been going down. It has been going down because of their growth in number of sites & suites they have been acquiring over the years. With this low payout ratio the dividend should be able to continue to rise in the future. Also please note the 2017 figure is as of Sept 30th.

Number of Suites & Sites

Since 2010 the company has been on a spending spree, increasing their holdings by 21,111 suites and sites (apartment’s). The addition of these properties has fueled the growth in revenue and the dividend as we saw earlier in this post.

Geographic Diversification of Portfolio

As you can see the company has property throughout Canada. Ontario is by far the largest market and Canadian Apartment Properties is attempting to acquire outside of Ontario so they don’t rely to heavily on the province. Europe has been the center of attention for them over the last couple of years, they currently own just over 1,500 properties in The Netherlands. In Ireland they have a 15.7% ownership in Irish Residential Properties REIT, and they manage the properties on behalf of Irish Residential Properties REIT.

The Purchase

On Nov 20th I purchased 40 shares at a price of $37.20 per share. The total cost plus trading fee came to $1,497.95.

Income

With this purchase I will earn $4.27 per month or $51.24 annually.

Well fellow investors that wraps up my post about my latest purchase. I have used up my funds from the sale of Boardwalk REIT. Do you like my purchase? Do you own CAR.UN? Please feel free to leave a comment, I always enjoy reading them.

Thanks

Matthew