In today’s yield-starved world, it’s hard to get decent income from any asset class. A decade ago, dividends of 8%...10%...or even higher were relatively common. These days? Not so much.
But there are still solid dividend payers that can deliver dividends far greater than any fixed income options. One such company is Artis REIT (TSX:AX.UN).
Artis owns retail, industrial, and office properties across five Canadian provinces and three U.S. states, with a total portfolio of 249 different properties and nearly 26 million square feet in gross leaseable space.
Growth potential remains solid. The company has $130 million in development projects slated to be completed in 2016 with more than $400 million planned over the next handful of years. It also continues to buy new property on the open market.
Occupancy is better in the company’s U.S. portfolio than its Canadian one, with 96% of property south of the border leased. Only 92.1% of property in Canada has been leased. Like many other REITs, Artis was hit by Target leaving Canada.
Funds from operations, a key profit number for REITs, was $1.49 per share for Artis in 2015, putting shares at just over nine times earnings, a very low number for a company in 2016.
These earnings should be enough to ensure Artis can continue paying out its succulent dividend, which currently yields 7.9%. The payout ratio was just 72.5% in 2015, with company projections expecting it to drop to closer to 70% in 2016.
