Buy the Dip? This REIT is Paying 6.4% and Near Its 52-Week Low


H&R Real Estate Investment Trust (TSX:HR.UN) has fallen 8% over the past six months and a disappointing Q3 result in November has only made things worse for the stock.

With net income falling more than 34% last quarter, investors have been on edge as the REIT has been busy with asset sales over the past two years and ways to strengthen its balance sheet. There’s been some transition at H&R and that’s led to some uncertainty in the share price.

The good news, however, is that the company continues to have properties under development that will add to its long-term growth potential.

And that’s important as growth hasn’t been the company’s strong point as sales from 2015 to 2018 have actually declined by 1%. Net income hasn’t made much progress, either. But for income investors, as long profits remains stable, that’s what matters.

While H&R may have suffered a setback in Q3, it still has the potential to bounce back and it’s still a good dividend stock to own today.

Currently yielding 6.4%, H&R is one of the higher-yielding REITs that investors can find on the TSX. And with a beta of around 0.6, the stock is generally not very volatile and could make for a stable dividend to add to your portfolio.

It is currently trading below its book value at around 0.9. Its price-to-earnings multiple is a bit high at over 25, but that’s also inflated due to the poor result the company posted in Q3.

Trading near its 52-week low, H&R could be a bargain buy.