There are investors who like to base their Reit selection on two criterias: Price to Book Value and Dividend yield.
This post was originally posted here. The writer, D Wong is a community member on InvestingNote, with username known as Pizzaprata.
Based on the latest quarter’s results and closing prices:
M Reit’s P/B is 1.41 and yield is 5.7%
S Reit’s P/B is 0.76 and yield is 6.9%
From the above M Reit looks overpriced and S Reit looks attractive. Both Reits had their IPOs just one month apart in Oct/Nov 2010 with similar IPO prices of 0.93 and 0.917 respectively. That’s where the similarity ends, from the price performance chart below you can see that M Reit has doubled it’s share price since IPO while the other has dropped to less than half.
The reason is simple, M Reit has consistently improved it’s DPU every year whereas S Reit had to cut it’s DPU