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Canadian Apartment Properties (CAR.UN-T)
424 watching
TSE:CAR.UN
49.31
0.54
(1.11%) 1d
Financials
Technical Analysis
Buy, Sell or Hold?
Jan 27, 2023, 9:00 pm
0
TOP PICK
Stockchase Research Editor: Michael O'Reilly We again reiterate CAR.UN, an $18 billion REIT holding 67,000 residential apartments and land sites in Canada and the Netherlands as a TOP PICK. Recently reported earnings and revenues were each up over 5% over the year and occupancy rates are over 98%. It continues to grow its portfolio ($1.7 billion since 2021), while managing debt and interest coverage. We continue to recommend a stop loss at $39, looking to achieve $54 -- over 25% upside. Yield 3.3% (Analysts’ price target is $54.25)
investment companies / funds
$42.740
Unknown
PAST TOP PICK
(A Top Pick Jan 25/22, Down 17%) Stock price is a reaction to rising rates. REITs are competing with bonds, so why own a REIT when you can own a bond that's more predictable? Wonderful assets, best in Canada. Rent increases. Bond market is saying interest rates have peaked, so this will become more attractive.
investment companies / funds
HOLD
Thinks highly of management. A great play on the GTA which boasts the highest rent growth. That said, they operate in rent-controlled markets, though. They see a nice increase in rents during renewals. They struggle, but are managing to manage costs. Upside is better than downside, so a solid hold. Solid assets.
investment companies / funds
TOP PICK
Believes long term fundamentals of Canada apartment sector is strong.
Canadian Federal government targeting high levels of immigration (will create demand for apartments).
Headwinds in the form of Provincial rent controls that don't compensate for inflation.
Believes interest rates will fall in the short term which provides relief on borrowing costs.
Current share price presenting a good buying opportunity.
investment companies / funds
TOP PICK
Stockchase Research Editor: Michael O'Reilly Given the demand for rental property and a plan by the Canadian government to increase immigration over the years ahead, we reiterate CAR.UN as a TOP PICK. Canada's largest residential REIT a TOP PICK trades at 12x earnings and under book value. This REIT has increased its distribution for 10 consecutive years and operates with a payout ratio under 65% of cash flow. We recommend trailing up the stop loss (from $36) to $39, looking to achieve $57 -- upside over 36%. Yield 3.35% (Analysts’ price target is $56.93)
investment companies / funds
DON'T BUY
Steady eddy, yield proxy. Growing only 2%. Came down, but still too expensive around 21x. Better yield, growth and upside in names like AX.UN or CRR.UN. In a non-registered account, you're probably OK. In registered accounts, he'd sell and buy something better. Yield is 3.6%.
investment companies / funds
TOP PICK
The whole sector has fallen back to its pandemic low, but apartment REITs face some tailwinds. Ottawa is targeting immigration levels of 450,000 per year through 2024 (vs. pre-Covid of 340,000). They will need places to live. Also, foreign students have all come back, and there's a housing shortage in Canada. CAP operates 50% of its business in Ontario, plus BC and Quebec. Short-term headwinds are interest rates and rent controls of 1.2% (2022) and 2.5% (2023) in Ontario. CAR can absorb this. Their dividend now pays 3.5%; they have not cut their dividend in the past 10 years, and has raised it in 9 of those years. (Analysts’ price target is $57.75)
investment companies / funds
BUY on WEAKNESS
Rising interest rates hard on the company (ability to finance growth).
Rent control programs in Canada make for tough business environment.
Demand for apartments not going away.
Good time to buy shares.
investment companies / funds
TOP PICK
Stockchase Research Editor: Michael O'Reilly Rising interest rates have impacted the support for this REIT lately; however, given the demand for rental property the value looks good here making Canada's largest residential REIT a TOP PICK. Trading at 11x earnings and under book value, the yield looks supportable with a payout ratio under 40% of cash flow. We recommend placing a stop loss at $36, looking to achieve $61 -- upside over 48%. Yield 3.57% (Analysts’ price target is $60.95)
investment companies / funds
HOLD
Largest Canadian apartment REIT ($7 billion market cap).
Has owned shares in the past.
Regulatory issues with regards to rental properties a concern.
Share prices reflecting concern regulatory issues will cap profits.
Trading at a discount to net asset value.
investment companies / funds
TOP PICK
Bellwether for apartment REITs. Always so expensive, but now trades at discount to NAV. Biggest concern is energy costs, but these have come down, which will help margins. Rents can be raised about 6-7% on churn. Dynamics are good. Gets funding through CMHC, so loan spreads are not an issue. More apartments needed. Yield is 3.43%. (Analysts’ price target is $57.87)
investment companies / funds
WATCH
She's looking at it, because shares have fallen a lot. But there is demand for apartments. Apartment REITs are down because of higher interest rates. True, rents are rising a lot, but there is also rent control which caps that in older buildings, and some rent increases aren't keeping up with rising costs. That said, the long-term outlook is attractive. Also, she likes CAP REIT's stake in Europe.
investment companies / funds
WATCH
Before, it was richly valued. The pandemic saw money flow out of office and retail REITs into apartments. Now, that's come off, post-Covid. He sees a tougher time ahead for all real estate, though apartments should be stable and will benefit from a softer economy. Their 3% dividend isn't enough to convince him to buy in this inflationary period. Not sure where the share appreciation will come from. He continues to watch it.
investment companies / funds
BUY
Allan Tong’s Discover Picks CAR.UN stock trades at a 12.31x PE which has more than doubled since the end of June. That would be a cause of concern if it wasn’t for the 18.42x PE which hasn’t changed in that time frame. Its 3.25% dividend is safe at its 39.76% payout ratio. Read 3 Promising REIT Stocks for our full analysis.
investment companies / funds
WEAK BUY
Nothing wrong with this name. Very well run. Interest rate sensitivity is lower than you think, as they can access CMHC financing. He'd prefer BEI.UN, with a discount on valuation and comparable growth profile. BEI.UN gives you potential for growth and for multiple expansion.
investment companies / funds
Canadian Apartment Properties(CAR.UN-T) Rating
Ranking : 5 out of 5
Bullish - Buy Signals / Votes : 10
Neutral - Hold Signals / Votes : 3
Bearish - Sell Signals / Votes : 2
Total Signals / Votes : 15
Canadian Apartment Properties(CAR.UN-T) Frequently Asked Questions
What is Canadian Apartment Properties stock symbol?
Canadian Apartment Properties is a Canadian stock, trading under the symbol CAR.UN-T on the Toronto Stock Exchange (CAR.UN-CT). It is usually referred to as TSX:CAR.UN or CAR.UN-T
Is Canadian Apartment Properties a buy or a sell?
In the last year, 15 stock analysts published opinions about CAR.UN-T. 10 analysts recommended to BUY the stock. 2 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Canadian Apartment Properties.
Is Canadian Apartment Properties a good investment or a top pick?
Canadian Apartment Properties was recommended as a Top Pick by on . Read the latest stock experts ratings for Canadian Apartment Properties.
Why is Canadian Apartment Properties stock dropping?
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
Is Canadian Apartment Properties worth watching?
15 stock analysts on Stockchase covered Canadian Apartment Properties In the last year. It is a trending stock that is worth watching.
What is Canadian Apartment Properties stock price?
On 2023-01-27, Canadian Apartment Properties (CAR.UN-T) stock closed at a price of $49.31.
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