I decided to close my position in RioCan REIT (REI.UN.TO). RioCan is one of the largest real estate investment trusts in Canada and specializes in the retail space. The company owns interest in 340 retail properties in Canada and US, including 15 properties under development.
It has been one of my longest holding – a position that I initiated in April 2009 (right at the bottom of the market during the financial crisis). It was yielding 10% and back then – in my chase for yield, decided to initiate a position. In a matter of months, the stock price doubled and has stagnated since. However, I was able to reap the 10% yield-on-cost month after month. Its a company which has good financials, but shareholders currently get a 5% yield. While that is ample dividend to expect from a stock, the company has failed to raise dividends during good times and my patience has run out.
That was not the only motivation to sell.
I also needed access to some cash – and had to sell something from my Tax Free Savings Account (TFSA) and withdraw the funds. Considering various other options in that account, I figured I’d rather sell a stock with stagnant dividend instead of companies with lower yield that regularly give me pay raises.
Overall profit (including dividends) was approx 150% over a course of approx 7 years. With this sale, I lose approx C$101 in forward annual dividends.