Covivio SA

For those investors who are seeking a stable component to their portfolios, REITs or Real Estate Investment Trusts are gaining popularity. What is a REIT? It is a way in which investors can invest in real estate buildings, developments, or even certain infrastructure through the equities market. Some examples include apartment buildings, malls, and healthcare centers like hospitals. In the United States, REITs are often popular because the underlying stock has low volatility, while the shares return a very healthy dividend yield that is guaranteed by the very legal nature of a REIT. Learn More
Covivio (EPA:COV) is a REIT based out of Paris, France that trades on the Euronext exchange and is also a component of the CAC Mid 60 index. The company began operations in 2000 and has since amassed an impressive portfolio of French hotels and other types of real estate. Its annual revenues have crossed €1 billion and the REIT has a market cap of just under €7 billion.
The Bullish Case : Covivio was hit hard during the COVID-19 pandemic as can be understood for a company who primarily holds investments in hotels. With the hospitality industry and global travel nearly completely shut down, hotels were left completely empty. Another large holding that Covivio is involved in is office space in France and Italy, which was another sector beaten down by the pandemic in two of the worst hit countries in Europe. The tailwinds are here for Covivio to reopen with a vengeance once COVID-19 has been placed under control. With cases decreasing in both France and Italy as of late, there is reason for optimism amongst investors. Much of this optimism is already baked into the price as it trades near its 52-week high, with anticipation for European travel reopening buoying other stocks like Intercontinental Hotels (LON:IHG) and Ryanair (LONG:RYA). The dividend yield is impressive with a 4.92% dividend usually paid annually to shareholders, rather than quarterly or even monthly like in the United States.
The Bearish Case: With Covivio the bearish case is basically if COVID-19 continues to spread and another wave hits France. Another potential headwind is if French companies simply abandon going back to the office at a higher rate than originally thought, which would mean Covivio may need to work fast to find tenants for its office spaces. But with the global control of the pandemic on the upswing as vaccinations are carried out around the world, Covivio makes for the perfect reopening play for two of the largest markets in Europe.
The Final Verdict on Covivio : The stock is already expensive, but investors are quite literally buying in at the right time as both offices and hotels look to be back in full use at some point in the near future. Investors who want in on the annual dividend payout may have already missed the boat this year, as the dividend was paid out on April 28th, or a week after the General Meeting. Still, Covivio should perform well in the coming months and can still be a rock solid part of a well diversified portfolio.

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

Latest News

Subscribe to our NEWSLETTER

Schreiben Sie einen Kommentar

Ihre E-Mail-Adresse wird nicht veröffentlicht. Erforderliche Felder sind mit * markiert.