ACT NOW: Retire Rich on This Real Estate Value Stock

Cominar Real Estate Investment Trust (TSX:CUF.UN) appears to be a great investment for retail investors searching for exposure to the Montréal real estate market.

Cominar Real Estate Investment Trust (TSX:CUF.UN) owns and manages a diversified portfolio consisting of office, retail, industrial, and residential properties located primarily in Québec and Ottawa. The company owns 325 properties, of which about 200 are located in Montréal, 100 are located in Québec City, and 25 are located in Ottawa. Cominar’s portfolio includes approximately 11.1 million square feet of office space, 9.5 million square feet of retail space, and 15.4 million square feet of industrial space.

The company has a price-to-earnings ratio of 17.13, price-to-book ratio of 0.55, dividend yield of 4.25%, and market capitalization of $1.55 billion. Debt is very sparingly used at Cominar, as evidenced by a debt-to-equity ratio of just 1.22. The company has excellent performance metrics with an operating margin of 47.52% and a return on equity of 3.16%.

Cominar’s portfolio is 95% leased. The company’s focus is on growing net asset value and exploiting expansion or redevelopment opportunities that provide attractive risk-adjusted returns. Cominar has achieved significant growth in cash flows from existing properties by increasing rental rates, improving occupancy and retention rates, as well as proactive leasing strategies, management of operating costs, disciplined allocation of capital, and controlling capital expenditures.

Recently, Cominar completed a detailed strategic review of all real estate operations and began the implementation of a clearly defined plan to solidify Cominar’s financial position, create value for unitholders, and position the company for growth. Cominar’s initiatives have allowed it to make significant progress toward these goals.

The company’s transformation plan aims to deliver operating efficiencies, accelerate operating income growth, and crystallize untapped portfolio value in order to generate value for unitholders. The plan includes initiatives such as researching new sources of revenue, workforce optimization, outsourcing arrangements, operating cost reductions, process automation, and leveraging technology.

Cominar has created a dedicated asset management platform to maximize portfolio returns and enhance the investment decision making process. The asset management team is in place and has completed a thorough review of the majority of the portfolio. The company is also focused on further strengthening and de-risking the balance sheet. Management appears committed to prudent management of the capital structure.

Cominar is targeting a disciplined reduction in leverage through higher retained cash flow, growth in the portfolio value and selective dispositions. Targeted dispositions, including the reduction of Cominar’s exposure to lower-quality non-core assets, include the disposition of fully valued liquid assets at historically low cap rates to unlock trapped equity value. In 2019, Cominar disposed of 46 non-core properties for gross proceeds of $260.6 million, 54% of which were retail properties.

Overall, 92% of the energy consumed in Cominar’s portfolio of properties comes from a renewable source. The remaining 8% comes from non-renewable energy sources such as natural gas. Cominar is equipped to monitor and analyze energy consumption in almost all properties. This allows the company to quantify the efficiency of new initiatives and propose solutions aimed at optimizing results. In 2020, the results of these energy-efficiency efforts translated to a reduction of more than 30% in energy use.

Cominar appears to be a great investment for retail investors searching for exposure to the Montréal real estate market.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

More on Investing

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

2 Canadian Dividend Stars That Still Offer a Good Price

These Canadian dividend stars still trade at attractive prices and have the potential to consistently increase dividends.

Read more »

Board Game, Chess, Chess Board, Chess Piece, Hand
Dividend Stocks

My 3-Stock TFSA Game Plan for 2026

Build a simple, high‑conviction TFSA portfolio for 2026 with three Canadian stocks offering stability, income, and long‑term compounding potential.

Read more »

Data center servers IT workers
Dividend Stocks

The Canadian Companies Driving the AI Infrastructure Buildout — and Why It Matters

Brookfield Corp. (TSX:BN) looks too good to ignore as its $100 billion spend seeks to unlock serious long-term value.

Read more »

Young adult concentrates on laptop screen
Dividend Stocks

What’s the Average TFSA Balance at Age 30 in Canada?

Grow your TFSA balance multi-fold by owning growth stocks such as Thomson Reuters right now.

Read more »

diversification is an important part of building a stable portfolio
Dividend Stocks

Where to Invest Your TFSA Contribution for Maximum Growth

A mix of stocks, ETFs, and REITs in a TFSA can provide diversified exposure and help drive maximum growth.

Read more »

Business success of growth metaverse finance and investment profit graph concept or development analysis progress chart on financial market achievement strategy background with increase hand diagram
Energy Stocks

A Canadian Energy Stock Poised for Growth in 2026

Uncover the growth opportunities in this energy stock as Suncor Energy optimizes operations and reduces breakeven costs for success.

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

A Canadian Dividend Stock Down 18% to Buy & Hold Forever

Canadian National Railway (TSX:CNR) is down 18% from its all-time high.

Read more »

Canadian investor contemplating U.S. stocks with multiple doors to choose from.
Dividend Stocks

Canadians Adding U.S. Stocks Right Now: Here’s 1 to Avoid and 1 to Buy

Steer clear of hype-driven turnarounds in favor of steady, cash-generating businesses with pricing power.

Read more »