galway_blow_in
Registered User
- Messages
- 2,102
http://investorrelations.iresreit.i...IR/presentations/i-res-report-apr2-1100am.pdf
Recently published financial statements for iRes REIT attached. Apparently, the company's initial portfolio is producing a net yield of 5%.
Yes, iRes is entirely focused on residential apartments (its promoter and major shareholder is CAPREIT - Canadian Apartment Properties REIT).
Bear in mind that the 5% yield refers to the net yield on the initial underlying portfolio - it's not the trailing yield on the company's shares. The IPO was completed in April 2014 so up until relatively recently the proceeds of the IPO and additional borrowings were not fully invested. I suspect the dividend yield for 2015 as a whole will be less than 4%, once provision is made for reserves and company expenses.
Green and Hibernia both have substantial amounts of development projects on their books so are probably not ideal vehicles if you are solely focused on income.
There are advantages and disadvantages to REITs (or any securitised property vehicles) as against directly held property. REITs are certainly far more passive as an investment, although you're obviously reliant on the company's management to achieve results. REITs also reflect a far more diversified portfolio than an individual investor can easily achieve and you would expect a large portfolio to achieve some efficiencies of scale. As against that, it is usually possible to leverage directly held property much more cheaply (although this is not necessarily the case in Ireland at the moment) and an individual can make his own decisions about whether or when to add value to a property by way of renovations, etc.
However, in general I agree with you that in most cases, REITs represent a far better way for most retail investors to gain exposure to a particular property market.
Well, 4% is only a very rough estimate on my part based on its current share price and the net yield on the underlying portfolio.
A 4% dividend yield would actually be pretty high - most of the large UK REITs have a trailing yield of less than 3% at this stage.
If you are particularly focused on income (for whatever reason), then I suggest you look at some of the investment trusts in the UK income sector (City of London, Merchants, Murray Income, etc.). However, I really don't think you will do much better than a 4% yield in this environment on any diversified portfolio without going way out on the risk curve. Stretching for yield is rarely a good idea.
The reason energy stocks pay such a high dividend relative to other stocks is because they are extremely volatile (and have tanked in recent months). There is an immutable relationship between risk and reward that you seem to be ignoring.
IRes owns hundreds of apartments across Dublin and the portfolio as a whole produces a net yield of 5%. I would be absolutely stunned if you could find an apartment anywhere in Dublin that could reliably produce a net yield of anywhere close to 10% without cheating on your calculations.
Energy stocks (and financials for that matter) have a much higher beta than the wider market. But, hey, if that's where you want to put your hard-earned money then fire ahead...
The reason energy stocks pay such a high dividend relative to other stocks is because they are extremely volatile (and have tanked in recent months). There is an immutable relationship between risk and reward that you seem to be ignoring.
IRes owns hundreds of apartments across Dublin and the portfolio as a whole produces a net yield of 5%. I would be absolutely stunned if you could find an apartment anywhere in Dublin that could reliably produce a net yield of anywhere close to 10% without cheating on your calculations.
according to yahoo finance , exxon mobil has a beta of .99 , proctor and gamble has a beta of .98
I doubt proctor and gamble is viewed as a high risk stock
anyway I fully realise that those energy companies have high yields currently due to the very significant reduction in their share price , I don't agree that this indicates they are highly volatile stocks though , its just good ol cause and effect
oil has collapsed in price , hence the companies who trade this commodity are in the toilet , I think they will only stay down for another year or so however , huge companies rarely stay down for several years on the trot and some of the super majors are priced where they were ten years ago
hey , if I thought I could collect 5% NET from investing on that REIT , id be happy enough to invest some in that space , I thought you said it was likely to be below 4% however ?
Last time I checked Exxon Mobile had a trailing yield of around 3.5% so it's hardly a typical high-yielding energy stocks. Look, if you want to invest in energy stocks yielding 6% that's your call but you're fooling yourself if you don't think that's a very high risk investment.
Apologies if I was unclear but I am not suggesting that there is a correlation between the yield on a stock and its volatility. I was simply trying to make the point that energy stocks, in general, are more volatile than the wider market and currently have a high yield because they have tanked in recent months.
To be honest, I have never seen the attractions of dividend stock investing. Ultimately, total return is all that matters.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?