Opinions
Stockchase Insights
Tricon Residential
TCN-T
BUY
Feb 13, 2023
Stock price when the opinion was issued
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Good if you are looking for growth. Has seen a good level of growth. Pays a dividend yield of 1.6%. The company is somewhat leveraged. Unlock Premium - Try 5i Free
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Likes what they have done to set up the company well. Potential remains good. Likes the management and markets are starting to notice TCN. It is up 50% in the past year. Well positioned in the US market and their asset portfolio looks good. First pick in the Canadian real estate sector. Unlock Premium - Try 5i Free
The market has punished it too much. It is in the residential rental sector in the U.S., especially in the sun belt. The rentals are affordable and appeal especially to the 35 to 44 year old demographic who want to rent good homes rather than buy. The share price is at a 40% discount to the total value of all its homes. Good opportunities should emerge.
TCN has $5.6B in debt, certainly an amount that can be considered high vs cash flow.
TCN has managed debt well. $3.8B of its debt is fixed rate.
It has collars and caps on its floating rate debt, and its effective interest rate last year was 3.36%.
This will increase somewhat, but because of its hedging it is less vulnerable to rates than others.
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