SGR-UN (Slate Grocery REIT)

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Came across this as a potential dividend play. Around a 680M market cap so on the smaller side but with a trailing PE of 7 and yield of 8%, what are some risks associated with using this as a dividend play?

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Asked on August 11, 2021 7:58 am
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Hey there!

I've spoke about this REIT a couple of times. Not recently though. The thing that really worries me are coverage ratios.

Right now as of the company's most recent earnings report, it is paying out over 100% of adjusted funds from operations in terms of distribution, and although its debt to gross book value ratios are going down, they're still pretty high.

It's been on quite the run up thus far in 2021, but in terms of a REIT, I'm slightly uncomfortable with those coverage ratios. In fact, this is what I've told everyone who's asked on here in the last 6-8 months. I do imagine coverage ratios will improve as the economy reopens and the pandemic subsides. But, I'd view this distribution as one of higher risk.

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Posted by Dan Kent
Answered on August 13, 2021 8:09 am