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Dundee REIT

Dundee REIT. Generously Sponsored By:. Please note that the content of this presentation is only for educational purposes. Please consult an expert for financial advice. Disclaimer.

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Dundee REIT

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  1. Dundee REIT Generously Sponsored By: Please note that the content of this presentation is only for educational purposes. Please consult an expert for financial advice.
  2. Disclaimer This research report is for educational purposes and for the use of the club in making a democratic decision pertaining to the purchase of the following equity Please consult an investment professional when considering personal investments The MACIC is not responsible for any personal losses incurred as a result of purchasing the stock presented in the following presentation. Info@macic.ca Mac Investment Club www.macic.ca
  3. Sector Team Name Graham Stirling stirlig@mcmaster.caFund Manager Greg Best bestgw@mcmaster.caAssociate Alex Zhang zhanga@mcmaster.caAssociate Greg Mumford mumfordgj@mcmaster.ca Associate YuhanFei feiyuhan2004@gmail.comAssociate Info@macic.ca Mac Investment Club www.macic.ca
  4. Agenda REIT Overview Opening Remarks Company Overview Industry/Sector Overview Peer Comparison Revenue & Earnings Ratios Technical Analysis Summary Recommendation Info@macic.ca Mac Investment Club www.macic.ca
  5. REIT Overview What are REITs? Real Estate Investment Trusts acquire and manage retail, residential, apartment, office and industrial properties. REITS are not taxed and pay 90% of their profits in the form of dividends. How to invest in REITs: Funds from Operation (FFO) > Earnings Occupancy Rates Dividend Yields Interest Rates Info@macic.ca Mac Investment Club www.macic.ca
  6. Opening Remarks Selection methodology: Large Cap REIT High Occupancy Rate High Dividend Yield Currently REIT industry is strong as interest rates remain low No personal ownership of stock by Real Estate Sector team Info@macic.ca Mac Investment Club www.macic.ca
  7. Company Overview Dundee acquires and manages office properties across Canada. As of June 30, 2012, the company owned 171 office properties and 77 suburban industrial properties. Asset Diversification: Western Canada: 18% Calgary: 20% Toronto: 40% Eastern Canada: 22% Risk Profile: Low – low volatility stock Average True Range (ATR) = 0.37 (1% of current price) Beta = 0.77 Current FFO/Share = 2.88 Industry Avg. FFO/Share = 1.4 Info@macic.ca Mac Investment Club www.macic.ca
  8. Company Overview Cont Above: Dundee’s one-year price chart Stock price has increased over the last year due to low interest rates and strong performance - Q2 results with NOI increasing 83% over the year prior and 21% over Q1 2012. Info@macic.ca Mac Investment Club www.macic.ca
  9. Industry Overview Risks: Political risks: low Interest rate risk: low Occupancy/valuation risk: low Industry Trend: Property Acquisitions due to low interest rate Industry volatility is low – the REIT industry is less sensitive to economic changes Industry growth: steady growth Info@macic.ca Mac Investment Club www.macic.ca
  10. Industry Overview Cont Above: One-year price chart compared to the SPTSX; Dundee REIT – Black As seen in the graph above, Dundee REIT is not sensitive to economic changes Info@macic.ca Mac Investment Club www.macic.ca
  11. Peer Comparison Dundee – Black; Boardwalk – Yellow; Riocan – Green; Cominar – Purple High correlation between large-cap Canadian REITs Primary way for REITs to earn above-industry returns: High occupancy rates Acquiring valuable properties Keeping costs/expenses low Info@macic.ca Mac Investment Club www.macic.ca
  12. Peer Comparison Cont Key Comparisons: High dividend yield of 5.9%, above peer comparison of 4.86% Occupancy rate of 95.6%, above industry average of 91.8% Price/FFO ratio of 13.31, compared to peer comparison of 15.65 FFO/Share of 2.88, compared to peer comparison of 1.4 Info@macic.ca Mac Investment Club www.macic.ca
  13. Revenue & Earnings FFO Annually: 2003-2011 FFO per Share (Quarterly): 2008-2011 Info@macic.ca Mac Investment Club www.macic.ca
  14. Revenue & Earnings Info@macic.ca Mac Investment Club www.macic.ca
  15. Ratio Analysis Our ratio analysis indicates that Dundee is in good financial shape, has high growth prospects and can be purchased at a relatively cheap price. Info@macic.ca Mac Investment Club www.macic.ca
  16. Technical Analysis Dundee - 15 Day vs. 50 Day SMA Currently trading below the 50-day moving average shows potential room for an increase in the share price. Info@macic.ca Mac Investment Club www.macic.ca
  17. Technical Analysis Dundee – Bollinger Bands Last week the price hit the support band and is currently trading around the moving average. Info@macic.ca Mac Investment Club www.macic.ca
  18. Technical Analysis Dundee – Candle Stick Chart Over the past four months there have been 8 bullish indications and 6 bearish patterns. Info@macic.ca Mac Investment Club www.macic.ca
  19. Summary Relative to competitors, Dundee REIT has an attractive dividend yield, a high FFO/Share and the lowest Price/FFO ratio. Occupancy rate of 95.6%, which are above industry average of 91.8%. Dundee REIT will provide diversification to the club’s portfolio since REITs are less sensitive to economic changes. Interest rates are expected to remain low for the club’s 2012/2013 holding period. Key Dates: Q3 report released on November 5th. Info@macic.ca Mac Investment Club www.macic.ca
  20. Recommendation Buy 150 shares of this stock at market price Approx. $36.56 per share = $5,500 total Buy at market because of low volatility Average True Range (ATR) = 0.37 (1% of current price) Price Target $38.50 Do not sell at this point, hold for duration of the year for monthly distributions (5.9% annualized) Projected 4.7% capital appreciation Info@macic.ca Mac Investment Club www.macic.ca
  21. QUESTIONS? THANK YOU! Info@macic.ca Mac Investment Club www.macic.ca
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