Tuesday’s TSX breakouts: Investors are turning to safe-haven income-paying securities

On today's TSX Breakouts report, there are 31 securities on the positive breakouts list (securities with positive price momentum), while the number of stocks on the negative breakouts list (stocks with negative price momentum) has inched up to 18.

There is a high number of real estate investment trusts (REIT's) on the positive breakouts list as investors seek shelter from the market volatility in high-dividend paying investments. Discussed today is a dividend paying security that analysts forecast has over 9-per-cent upside potential, Brookfield Property Partners LP (BPY.UN-T).

A brief outline is provided below that may serve as a springboard for further fundamental research.

The company

Brookfield Property Partners LP owns a diversified mix of real estate assets such as office properties, retail shopping centers, and office and multi-family assets worldwide. Brookfield Asset Management Inc. is Brookfield Property Partners largest investors with an interest of approximately 68 per cent, or 62 per cent on a fully diluted basis.

The company is dual listed, trading on the Toronto Stock Exchange, under the ticker BPY.UN, as well as on the New York Stock Exchange, under the ticker, BPY.

Before the market opened on May 6, the company reported first-quarter results, relatively in-line with expectations. Funds from operations (FFO) came in at 31 cents (U.S.), up 24 per cent from 25 cents last year, with the consensus estimate at 32 cents. Brian Kingston, the chief executive officer noted in the earnings press release that, "Incremental revenue from signed leases and new investments will support further earnings and distribution growth in 2016 and 2017." management is anticipating annual FFO per unit growth of between 8 per cent and 11 per cent. The unit price was relatively unchanged that trading day, rising a penny to close at $30.90 (Canadian)

Distribution policy

The company pays unitholders a quarterly distribution of 28 cents (U.S.) per unit, or $1.12 on a yearly basis. This equates to an annualized yield of 4.6 per cent.

Management's target a funds from operations payout ratio of 80 per cent, with between 5 per cent and 8 per cent annual distribution growth.

Valuation

On a price-to-adjusted funds from operations basis, units of Brookfield Property Partners are trading at a multiple of over 22 times the consensus 2017 estimate.

Analysts' recommendations

According to Bloomberg, there are four buy recommendations, and no hold nor sell recommendations. The average one-year target price is $34.19 (Canadian), which implies the unit price can potentially increase over 9 per cent. Individual price targets, converted to Canadian dollars, are as follows: $32.32, $33.61, $34.45 and $36.40.

The Street is forecasting FFO of $1.35 per unit (U.S.) in 2016, rising 10 per cent to $1.49 in 2017. The consensus AFFO per unit estimate is 90 cents in 2016, increasing to $1.09 in 2017.

Chart watch

Since the beginning of 2015, the unit price has been quite volatile, peaking several times north of $32 (Canadian), and dipping down to the $26 range.

The unit price is nearing strong overhead resistance. On Feb. 12, 2015, the unit price peaked at $33.12, and on Dec. 24, 2015, rallied up to $32.40. Consequently, the $32.50 to $33 represents a level of high resistance. Units of Brookfield Property Partners have downside support at $30, then around 29, which is close to its 200-day moving average (at $29.21). Failing that, there is support around $28, and then at $26, which marks its closing price on February 12, 2016 (at $26.07).

The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. In addition, this report highlights a company's dividend policy, analysts' recommendations, and provides a brief technical analysis for a security to provide readers with more information.

If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. If a security appears on the negative breakouts list, this indicates negative price momentum, and may be indicative of either deteriorating fundamentals or perhaps indicates a buying opportunity.

A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.

Below is a list of securities principally from the S&P/TSX composite index and the S&P/TSX Small Cap index that are technically breaking out, reaching new 55-day highs or lows. Securities on the positive breakouts list have displayed positive price momentum during this period. Securities on negative breakouts list have experienced negative price momentum.