Slate Office REIT (SOT.UN)

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Dividend yield is over 10% now with the price slide in the past few days. It owns quality office assets. Most tenants are government or credit tenants. AFFO payout ratio is a healthy 84% for the full year 2022. I cannot see anything wrong with this stock. Any comments?

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Asked on March 17, 2023 8:22 am
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Hey there David! I will summarize Mat's thoughts here from the Discord in regards to this just so everyone can see:

So, it was hanging on ok until True North announced a 50% dividend cut and it looks like all those in the office space dipped along with that news. That said - payout ratio did jump to 84% from 74% previously as FFO dipped and trust units increased - that isn't a good combination. It's got quite a bit of debt still and interest coverage ratio is ok but not great. Looks like it is also undergoing a strategic review, which is usually a sign that the current path they are on is not necessarily the best one. Overall, it's 'ok' but the office REIT industry is still under lots of pressure. They have higher than average debt loads and low occupancy rates. Even SOT's occupancy rate dropped to 81.1% from 83.8% last year. Having close to 20% of your properties unoccupied isn't great.

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Posted by Dan Kent
Answered on March 18, 2023 1:30 pm