[rd_aaron]

I was wondering what everyone's opinion was on these two REITs. I've owned both at some point, but only own REF.UN right now. It has given me a sizable capital appreciation and I'm thinking of harvesting that gain and putting it into REI.UN instead.

I know it's not everything, but here are a couple of reasons I've thought about switching:

REF.UN:
P/E - 45.12
Yield - 3.52%

REI.UN:
P/E - 6.69
Yield - 5.04%

Riocan has some big anchor tenants in it's portfolio, so I'd feel comfortable with them. Canadian REIT is a little more diversified with industrial and office space as well as retail. They have tracked very similarly since their inception, but REF.UN has outperformed REI.UN.

 

[andrewf]

P/E is not a useful metric for REITs. Usually analysts look at FFO (Funds From Operations) rather than net income. So P/FFO would be a more meaningful ratio to look at.

 

[My Own Advisor]

I don't own REF.UN yet, owned RioCan for a bit, love it. Been a nice ride from $19 over the last couple of years. Solid yield.

 

[rd_aaron]

I've had a nice run with REF.UN as well. Bought at $33.31 at the end of May 2011, and it sits at $42.03 as I type this. Been having trouble letting it go as it just seems to keep going up and up.

 

[Mall Guy]

These two are very different plays on the sector. REF is very conservative, with a very low payout ratio. This was rewarded in the roller-coaster that took place in 2008-09. Just look at a 5 or 10 year chart for both. Yes, REF fell off its moving average (35%), but not as steeply as REI (almost 50%).

If your looking for rock-star stability stick with REF. Want to take some profit off the table, don't hesitate to put it into REI. Both are the 'granddaddies' of the REIT world. REI is a regular issuer of new equity, not so sure about REF - seems to me they use cash on hand (plus other banking facilities) to fund their acquisition activity - meaning less dilutive to unitholders.

 

[blin10]

all I know is when I'm driving around most of the top malls operated by REI, i'll be buying a lot more on a way down if it'll happen