I logged into Twitter on Saturday to see what was going on in the world and I noticed a lot of tweets about the REIT Cominar. It ends up management has decided to decrease the stock’s dividend to $0.06 cents per unit. The few dividend investors that I follow online (and who probably own more stocks than I do) were visibly upset about the dividend cut and threatened to sell their shares the following Monday when the stock market opens again.
Although I don’t currently own any shares in Cominar, I started looking into what their management was trying to achieve with these dividend cuts. For one, they need to get their debt ratio below 50%. As of December 31st, 2017 it was at 57.4%, up from 52.4%. But I get it. They need to stop the financial bleeding. Too much is going out in dividends compared to what they actually earn. My husband and I had the same problem while we were paying for our son’s ABA therapy. We were hemorrhaging money it was so expensive. Think $6k per month in medical expenses. However, once our son’s therapy ended, we had to tighten our belts again, even more so than before to get back on our feet.
I do think there is ‘dividend hope’ for Cominar. They need to cut their dividend to insure they can continue paying dividends in the future. In fact, if I get a chance to take a closer look at their numbers (remember, I have four kids) I might even consider adding them to my nascent portfolio in spite of the recent news. I live in Québec where Cominar has a huge stake, and Québec is steadily growing. A few areas that immediately come to mind are Vaudreuil, St-Remi, and the northern part of the Montérégie region in general. The growth they are currently experiencing is impressive.
Here is a link to the recent news on Cominar where I gathered some of my information.
Tell me what you think of the news. Is Cominar a part of your portfolio?