TSE:MEQ
Mainstreet Equity Corp (MEQ.TO)
Financials 
Technical Analysis ;fill-opacity:1;'/%3e%3cpath%20d='M31%2018.6001V30H8V18.6001L14.1334%2022.4334L19.4999%2014L24.8669%2022.4334L31%2018.6001Z'%20fill='%23EE5432'%20style='fill:%23EE5432;fill:color(display-p3%200.9340%200.3310%200.1956);fill-opacity:1;'/%3e%3c/svg%3e){kind=small}
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Really likes it, though illiquid. Adept at growing portfolio base and NAV, despite not having to issue any equity, the holy grail of real estate. Really likes Canadian western apartment markets, especially where no rent control. Rents go higher, and so NAV goes higher.
Andrew MoffsPremium contentPremium contentPremium contentPremium contentWe reiterate this Calgary based multi-family property manager -- a play on the recovery of the Alberta economy. We like that cash reserves are growing, while debt is retired and shares are bought back. It still trades under book value. We continue to recommend a stop at $125, looking to achieve $166 -- upside potential of 22%. Yield 0%
(Analysts’ price target is $166.67)Premium contentWe again reiterate MEQ as a TOP PICK. Latest earnings reported income up 22%, on a 18% increase in revenues -- meaning margins are growing despite inflationary pressures. We like that cash reserves are growing, while debt is retired and shares bought back. We continue to recommend a stop at $125, looking to achieve $166 -- upside potential of 21%. Yield 0%.
(Analysts’ price target is $166.67)MEQ operates as a real estate corporation focusing on managing residential rental apartments and is now trading at 27.6x times' Forward P/E, but only at 1.0x Book value. In the last five years, MEQ’s revenue growth has been quite consistent, around 12% on average. Like other real estate companies, the balance sheet is leveraged, with net debt of $1.5B. The net debt/EBITDA is currently around 14.5x. MEQ reinvested heavily into acquiring new properties. As a result, the company has had no dividend payments and limited shares repurchase over the last few years.
We think MEQ has the potential to be a compounder, trading at 1.0x Book value is also an attractive valuation, but the leverage levels need to be monitored carefully, as the debt is quite high. We would be comfortable with this name for a three-year+ timeframe given its cheap valuation and consistent revenue growth.
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Very well run with a long track record. Is one of the best compounding stocks in Canada that nobody knows. It returns 20% annually for the last 20 years. They played Covid perfectly by buying companies and locking in their debt at 2% over 10 years. Are well positioned given Canada's housing shortages with low vacancies and more immigrants coming.
(Analysts’ price target is $163.33)
Jordan ZinbergPremium contentWe reiterate MEQ, with a portfolio of over 15,000 residential units in Western Canada, as a TOP PICK. Recently reported earnings showed double digit growth for the sixth consecutive quarter for all of its key growth metrics. Funds from operations were up 25%. Cash reserves grew, while retiring debt and buying back shares. We continue to recommend a stop at $125, looking to achieve $163 -- upside potential of 19%. Yield 0%
Premium contentAttractive long-term assets. Calgary-Edmonton based. Active in their portfolios. Looks extremely good from an ROC metric. Pay attention to the apartment sector, it's a good one right now.
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It is under-followed since it hasn't raised money in over 20 years. It buys and manages small and mid-size apartment buildings in Western Canada. Its number of apartments has grown substantially and continues to grow. It has a record high number of units rented as well as record high rents. The CEO is excellent and owns half the business.