Although I haven’t written much about my portfolio in the past months, I’ve been busy initiating positions in two great businesses: Realty Income Corporation (“RIC”) and Canadian Apartment Properties (“CAP”). Both of these businesses have been discounted lately as rising bond yields drive down the price of REITs. Why buy now? Both of these companies have a history of increasing their distributions over time, and pay very healthy yields in excess of any debt security I’d consider buying (5.6% for CAP and 5.5% for RIC). I was also very impressed by the high quality tenants and good diversity of RIC. Having lived in a CAP building in Ottawa, I know the company buys good properties, keeps them well maintained, and increases rents regularly.
The only two moves I foresee making in the next months are moving out of my position in SNC (and investing the proceeds in one of my current companies) and possibly deploying my excess cash in my RRSP if an overreaction occurs in the US markets (hopefully one of my long-term US company holdings misses an earnings estimate). My portfolio is in great shape as we move closer to year end.