Honeybees Pick the 5 Top Canadian REIT Investments

A different way to Evaluate Stocks

Author

Hank Svec
November 18, 2024

In partnership with

In our book What Grandpa Learned from His Honeybees, we discuss the principles and rules of the hive and how they apply to making money and investing. With the advent of AI, we took our book and asked AI to pick the top 5 companies in several sectors that followed our principles. Here is the analysis for Canadian REITs. We also picked 5 small caps that are listed after the first group. Remember, much more work is needed to evaluate if they are good investments; we thought it would be fun to analyze several sectors and, a year from now, see how smart it was to do so. Just based on our book, here is what AI found.

To evaluate the top five Canadian REITs using the ten strategies outlined in What Grandpa Learned from His Honeybees, the focus is on companies with high scores in sustainability, patience, discipline, collaboration, and consistency. Here are five Canadian REITs that excel in these metrics:

1. Granite REIT (GRT.UN)

  • Simplicity & Consistency: Granite’s focus on industrial properties aligns with the principle of specialization and consistency. It maintains a streamlined portfolio with steady occupancy rates.

  • Sustainability: Granite has shown disciplined growth through sustainable rental increases and conservative dividend policies.

  • Responsibility & Trustworthiness: The REIT’s 11-year dividend growth streak demonstrates a solid commitment to shareholders.

  • Overall Svec Score Estimate: 85/100

2. Canadian Apartment Properties REIT (CAPREIT, CAR.UN)

  • Simplicity: CAPREIT focuses on residential properties, which supports a straightforward operational model.

  • Patience & Consistency: CAPREIT invests steadily in affordable and mid-range housing in high-demand areas, reflecting patient, long-term growth.

  • Responsibility: With occupancy rates around 98%, CAPREIT shows reliability and responsibility in managing tenant relations.

  • Collaboration: CAPREIT’s strong partnerships with developers enable consistent portfolio expansion.

  • Overall Svec Score Estimate: 84/100

3. CT REIT (CRT.UN)

  • Simplicity & Trustworthiness: Leases primarily to Canadian Tire, aligning firmly with simplicity and collaboration principles.

  • Discipline: Maintains high occupancy and stable revenues through long-term leases.

  • Sustainability: Long-term tenant relationships with Canadian Tire make CT REIT financially sustainable, with minimal lease turnover.

  • Patience: With growth strategies linked to Canadian Tire’s expansions, CT REIT demonstrates a patient investment strategy.

  • Overall Svec Score Estimate: 83/100

4. Choice Properties REIT (CHP.UN)

  • Collaboration & Consistency: Choice Properties REIT’s partnerships with necessity-based tenants, like Loblaw, provide a reliable revenue stream and high occupancy rates.

  • Trustworthiness: Strong tenant relationships foster trustworthiness, especially with stable anchors in the food and pharmacy sectors.

  • Sustainability: Choice Properties has sustained performance despite market downturns by focusing on grocery-anchored retail.

  • Resourcefulness: Ongoing development projects allow incremental revenue opportunities and portfolio improvement.

  • Overall Svec Score Estimate: 82/100

5. SmartCentres REIT (SRU.UN)

  • Simplicity & Responsibility: Focuses primarily on retail properties anchored by Walmart, showing responsibility in tenant choice.

  • Collaboration: High occupancy rates and Walmart’s anchor influence ensure continued tenant demand.

  • Discipline & Consistency: Maintained stable dividends and high occupancy during economic challenges, reflecting disciplined operations.

  • Sustainability: Anchored by necessity-based retail, SmartCentres provides consistent foot traffic and long-term stability.

  • Overall Svec Score Estimate: 81/100

Using the principles from What Grandpa Learned from His Honeybees, here are five top Canadian REITs with market caps under $200 million that demonstrate qualities like sustainability, collaboration, responsibility, and trustworthiness:

  1. Automotive Properties REIT (APR.UN)

    • Sector: Specialized in automotive dealership properties

    • Principles Alignment: Consistent focus on a unique sector supports simplicity and sustainability. The company’s disciplined growth strategy and reliable dividends also indicate responsibility.

    • Estimated Svec Score: 81/100

  2. Slate Grocery REIT (SOT.UN)

    • Sector: Grocery-anchored retail properties in the U.S.

    • Principles Alignment: Slate’s focus on essential, high-demand properties reflects sustainability and collaboration, as partnerships with major tenants provide steady income.

    • Estimated Svec Score: 80/100

  3. Nexus Industrial REIT (NXR.UN)

    • Sector: Industrial properties

    • Principles Alignment: Nexus benefits from a high occupancy rate, showcasing simplicity and sustainability, while its adaptability to e-commerce trends emphasizes resourcefulness.

    • Estimated Svec Score: 79/100

  4. Firm Capital Property Trust (FCD.UN)

    • Sector: Diversified portfolio, including residential and retail

    • Principles Alignment: The trust’s focus on mid-market properties across Canada supports stability and a commitment to community, aligning with responsibility and sustainability.

    • Estimated Svec Score: 78/100

  5. PRO REIT (PRV.UN)

    • Sector: Retail, office, and industrial properties

    • Principles Alignment: PRO REIT’s diversified approach and strong presence in smaller markets demonstrate patience and a strategic focus, making it a well-rounded investment under these principles.

    • Estimated Svec Score: 77/100

These REITs exhibit resilience and strategic alignment with core principles for long-term growth, while maintaining diversified and necessity-driven portfolios that reflect sustainability and responsibility in their operations. Each of these aligns well with the principles of simplicity, patience, and discipline, key factors emphasized in the book.

 

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