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Minto Apartment Reit (TSE:MI.UN)
:MI.UN
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Minto Apartment Real Estate Investment Trust
(TSX:MI.UN)
65Neutral
Positive Factors
Capital Allocation
MI has allocated $15M of capital to the NCIB, which could signal confidence in the company's stock and provide support to its market price.
Revenue Growth
The large spread between in-place and market rental rates allows for continued revenue growth.
Stock Valuation
Minto currently trades at an implied cap rate of 6.3% or a 27.2% discount to NAV estimate.
Negative Factors
Financial Outlook
Confidence in the outlook is not as strong as it was previously.
Occupancy Challenges
Occupancy erosion likely prompted a more aggressive pricing response, indicating some challenges in maintaining occupancy levels.
Operating Costs
Abnormally high growth in property operating costs (+22.4%) was partly due to a favourable accrual booked in Q4.
Minto Apartment Real Estate Investment Trust (MI.UN) vs. S&P 500 (SPY)
Market Cap
C$522.27M
Dividend Yield3.8%
Average Volume (3M)171.01K
Price to Earnings (P/E)14.0
Beta (1Y)0.87
Revenue Growth0.16%
EPS GrowthN/A
CountryCA
Employees252
SectorReal Estate
Sector Strength74
IndustryREIT - Residential
Share Statistics
EPS (TTM)1.88
Shares Outstanding38,801,544
10 Day Avg. Volume134,508
30 Day Avg. Volume171,008
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.44
Price to Cash Flow (P/CF)4.50
P/FCF Ratio3.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$16.72Price Target Upside23.85% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Minto Apartment Real Estate Investment Trust Business Overview & Revenue Model
Company DescriptionMinto Apartment Real Estate Investment Trust (MI.UN) is a Canadian-based real estate investment trust focused on owning and managing high-quality multi-residential rental properties. Operating predominantly in urban markets across Canada, the company provides a range of apartment units catering to diverse tenant needs. Minto Apartment REIT is dedicated to sustainable property management and enhancing the living experience for its residents.
How the Company Makes MoneyMinto Apartment REIT generates revenue primarily through the leasing of residential apartment units. The company earns rental income from tenants residing in its portfolio of properties. This revenue stream is supported by strategic acquisitions and property developments that enhance the value and appeal of their offerings. Additionally, Minto Apartment REIT may benefit from property appreciation and capital gains through the strategic sale of assets, although its primary focus remains on generating stable rental income. Partnerships with property management and development firms, as well as adherence to sustainable and efficient management practices, contribute to the company's ability to maintain high occupancy rates and optimize rental yields.
Minto Apartment Real Estate Investment Trust Financial Statement Overview
Summary
Minto Apartment REIT shows a mixed financial performance. Revenue stability and gross profit margins are strengths, but profitability metrics are inconsistent. The balance sheet displays moderate leverage with a stable equity base. Strong cash flow generation is a positive, although financing activities could pose risks. Overall, the company maintains a reasonable financial position with room for improvement in profitability and leverage management.Income Statement
The income statement shows stagnant revenue with total revenue declining slightly to $157.1M from $157.9M annually. Gross Profit Margin stands at 64%, indicating good cost control. However, the absence of EBIT in 2024 and a negative EBITDA in 2023 are concerning. Net Profit Margin significantly improved to 40.3% from a negative figure, driven by a return to profitability.45
Neutral
Balance Sheet
The balance sheet is relatively stable, with a Debt-to-Equity Ratio of 0.82, indicating moderate leverage. Stockholders' equity increased slightly, reflecting improved net income. The Equity Ratio is 42.2%, which suggests a balanced approach to financing. However, the total debt remains high at $911M.60
Neutral
Cash Flow
Cash flow is strong with a positive Free Cash Flow growth of over 100% from 2023 to 2024. Operating Cash Flow to Net Income Ratio is healthy, showing good cash earnings. However, a negative financing cash flow indicates potential challenges in raising funds or paying down debt.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 157.09M | 157.93M | 143.79M | 123.55M | 124.93M | Gross Profit |
| 100.57M | 99.17M | 87.80M | 76.25M | 78.62M | EBIT |
| 0.00 | 23.17M | 87.80M | 76.25M | 121.94M | EBITDA |
| 90.93M | -82.39M | 86.65M | 112.42M | 121.94M | Net Income Common Stockholders |
| 63.24M | -116.66M | 388.88M | 54.24M | 96.17M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 5.88M | 3.74M | 5.32M | 2.85M | 2.61M | Total Assets |
| 2.65B | 2.70B | 2.73B | 2.44B | 2.20B | Total Debt |
| 910.98M | 930.05M | 903.48M | 681.67M | 630.03M | Net Debt |
| 905.10M | 926.31M | 898.15M | 678.82M | 627.42M | Total Liabilities |
| 1.53B | 1.62B | 1.52B | 1.43B | 1.35B | Stockholders Equity |
| 1.12B | 1.08B | 1.21B | 1.01B | 850.22M |
| Cash Flow | Free Cash Flow | |||
| 95.87M | 44.88M | 33.30M | 72.12M | 69.86M | Operating Cash Flow |
| 95.87M | 92.97M | 82.50M | 72.12M | 69.86M | Investing Cash Flow |
| 16.28M | -86.93M | -125.69M | -153.11M | -51.24M | Financing Cash Flow |
| -110.01M | -7.62M | 45.66M | 81.24M | -17.94M |
Minto Apartment Real Estate Investment Trust Technical Analysis
Neutral
13.50
Price Trends
13.18
Positive
13.36
Positive
14.37
Negative
Market Momentum
0.11
Negative
58.38
Neutral
38.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MI.UN, the sentiment is Neutral. The current price of 13.5 is above the 20-day moving average (MA) of 13.31, above the 50-day MA of 13.18, and below the 200-day MA of 14.37, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 58.38 is Neutral, neither overbought nor oversold. The STOCH value of 38.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:MI.UN.
Minto Apartment Real Estate Investment Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Performance Comparison
TSE:MI.UN
Minto Apartment Real Estate Investment Trust
13.46
-1.33
-8.99%
TSE:CHR
Chorus Aviation
19.40
5.12
35.85%
Minto Apartment Real Estate Investment Trust Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -0.15% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive sentiment with strong revenue and NOI growth, high occupancy rates, and increased distributions. However, challenges such as declining commercial revenue and rising operating expenses were noted. The REIT remains optimistic about future growth despite market challenges.Highlights
Strong Revenue and NOI Growth
The Same Property portfolio revenue grew by 6.1% to $39.8 million, with NOI increasing by 8.2% year-over-year and NOI margin reaching a quarterly record of 66.2%.
High Occupancy Rates
Closing occupancy remained strong at 97.4%, and average occupancy was consistent at 97.1%.
Distribution Increase
The REIT's Board of Trustees approved a 3.0% increase in distributions, marking a continuation of annual distribution increases since the IPO in 2018.
Reduction in Interest Costs
Prudent capital allocation decisions resulted in a reduction in interest costs, contributing to an 8.3% increase in normalized FFO and a 9.6% increase in AFFO per unit.
Successful Lease Signings
The company signed 449 new leases in the third quarter, generating a realized gain on lease of 10.8%, with Toronto seeing an increase from 9.2% to 10.5%.
Lowlights
Decline in Commercial Revenue
Commercial lease revenue decreased by 35.1% due to temporary retail vacancy at Minto Yorkville, with lease payments anticipated to begin in 2026.
Increased Operating Expenses
Total Same Property portfolio operating expenses increased by 2.1% over Q3 2023, with property operating costs rising by 3.2% due to higher digital advertising expenses and repairs.
Market Challenges in Toronto
Continued pressure from new condo and purpose-built rental supply in Toronto, with the company employing tactical promotions to maintain occupancy.
Company Guidance
During the Q3 2024 earnings call for Minto Apartment REIT, management provided comprehensive guidance on their performance and future outlook. The call highlighted a 5.9% growth in average monthly rent for the Same Property portfolio, with a strong closing occupancy of 97.4%. Same Property portfolio NOI increased by 8.2%, while the NOI margin rose by 130 basis points. Normalized FFO and AFFO per unit saw increases of 8.3% and 9.6%, respectively. The REIT's Board approved a 3.0% increase in distributions, continuing a trend of annual increases since their IPO in 2018. Notably, the REIT committed to upward financing of several properties, totaling approximately $91 million, enhancing their financial flexibility. Looking forward, Minto anticipates a sustained demand for rental housing despite potential market challenges, driven by an acute housing shortage and the relative affordability of renting. Management projects mid-single-digit revenue growth for 2025, while operating expenses are expected to rise modestly, influenced by weather-related factors and filling vacant positions.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.