Category Archives: Save Taxes

Plaza Retail REIT: Stock Analysis

This article was last updated on June 29, 2016.

About Plaza Retail REIT

Plaza Retail REIT logo

Plaza Retail REIT (TSX:PLZ.UN) is based in Fredericton, New Brunswick in Eastern Canada. It rents out retail properties such as strip plazas, single-use properties, and enclosed malls. Plaza’s unique business strategy drives its business via value-add opportunities to develop and redevelop retail real estate mainly in Eastern Canada.

Plaza Retail maybe a new name to you because it is a small REIT with a market capitalization of $473 million. On the Plaza Retail website, it states “Management owns a significant stake in the company.” So, the management’s interests are aligned with unitholders’ interests.

The REIT pays out monthly distributions that can be reinvested at a 3% discount if you enroll in the divistribution reinvestment plan. At $4.87 per unit, it yields 5.34% .

Retail Properties

At the end of Q1 2016, the REIT had interests in 302 properties, totaling 7.1 million square feet. Over half (exactly 51.9%) of Plaza Retail’s gross leasable area (GLA) is in Québec and New Brunswick. That said, as shown in the “Summary of Properties”, the GLA between the two provinces were diversified across 147 properties.

Plaza Retail REIT gross leasable area breakdown

Source data: Plaza Retail REIT Q1 2016 Report – p2

Plaza Retail REIT Properties Summary

Source: Plaza Retail REIT Q1 2016 Report – p2

Plaza Retail primarily leases to national retailers (90.5% of tenancy mix) with a focus on the consumer staples sector. So, the Target exit from Canada and the Future Shops to Best Buy rebranding has had little impact on Plaza Retail. Read More

Foreign Dividends with No Withholding Tax – Companies List

Last Updated: March 6, 2017

Usually, there’s a non-resident withholding tax on dividends paid by foreign companies. Canadians earning U.S dividends in their non-registered (taxable) accounts will automatically get 15% deducted. However, they can recover that by filing for a foreign tax credit. However, at the end of the day, they still pay the marginal income tax rate on those foreign dividends.

To save taxes on foreign dividends, Canadians can buy US dividend stocks in an RRSP instead. However, the point of this article is to record the list of companies which don’t have a withholding tax on the dividends for non-residence.

Here’s a list of companies which do not have withholding taxes on the dividends for Canadians. That means, if you’re holding these dividend companies in an RRSP or TFSA, you receive the full dividend.

If you like these companies, buy them in your TFSA or RRSP, and receive their full dividend. Because you get deducted 15% on US dividends in a TFSA but get the full dividend in an RRSP, you probably want to leave the room in your RRSP for US dividend companies with high yields.

  • BP plc (NYSE: BP) – *yield: 7% – an Energy company
  • Royal Dutch Shell plc (NYSE: RDS.B) – *yield: 6.7% – an Energy company
  • Unilever plc (NYSE: UL) – *yield: 3% – a Consumer Staple
  • Westpac Banking Corp (NYSE: WBK) – *yield: 5.3% – an Australian bank
  • BHP Billiton plc (NYSE: BBL) – *yield: 4.2% – a Basic Materials company
  • GlaxoSmithKline plc (NYSE: GSK) – *yield: 4.8% – a pharmaceutical company
  • HSBC Holdings plc (NYSE: HSBC) – *yield: 7.3% – a London-based bank doing business in 80 countries
  • Vodafone Group plc (NASDAQ: VOD) – *yield: 6.1% – a Telecom

*yield as of March 6, 2017. Note that I collected this list from the web, so there could be inaccuracies. Please let me know if any correction is needed. I will also add to this list as I come across such companies.

Foreign dividend risks

The fluctuating foreign exchange rate between the currency of the company and your currency will result in a fluctuating income for you. From 2014 to 2016, we also saw the horror of investing in resource-based companies as the commodity prices experienced a landslide.

It goes without saying that whether you’re investing for foreign dividends or not, the fundamentals and growth prospects of the company must be good. It’s probably wise to only invest in resource-based dividend stocks with a huge margin of safety because of the nature of their cyclical businesses.

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