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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)
Rating:68Neutral
Price Target:
C$15.00
▲(8.93% Upside)
Positive Factors
Capital Allocation
Unit repurchases remain an attractive use of capital, with Minto repurchasing $23.8 million of units at a 42.2% discount to the IFRS NAV.
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 our NAV estimate, indicating potential undervaluation.
Negative Factors
Interest Costs
The lack of growth in FFO per unit was also impacted by greater interest expense from refinancing debt at higher interest rates.
Market Conditions
It is difficult to see a near-term catalyst, particularly with weakness in the Canadian condo market.
Operating Expenses
Operating expense inflation of 5.9% contributed to a decrease in SP-NOI and margin contraction.
Minto Apartment Real Estate Investment Trust (MI.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$507.92M
Dividend Yield3.75%
Average Volume (3M)127.03K
Price to Earnings (P/E)5.7
Beta (1Y)0.78
Revenue Growth-0.29%
EPS GrowthN/A
CountryCA
Employees252
SectorReal Estate
Sector Strength55
IndustryREIT - Residential
Share Statistics
EPS (TTM)0.24
Shares Outstanding36,885,986
10 Day Avg. Volume147,540
30 Day Avg. Volume127,032
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$15.50Price Target Upside12.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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 that focuses on owning and managing a portfolio of high-quality, multi-residential rental properties. The company is dedicated to providing residents with modern, sustainable, and well-located living spaces across key urban markets in Canada. Minto Apartment REIT's properties are situated in major metropolitan areas, offering a range of amenities and services to enhance the living experience of its tenants.
How the Company Makes MoneyMinto Apartment Real Estate Investment Trust generates revenue primarily through rental income from its portfolio of residential properties. The company benefits from stable occupancy rates and rental increases in desirable urban locations, which contribute to consistent cash flow. Additionally, Minto Apartment REIT may engage in strategic acquisitions and developments to expand its property portfolio, potentially increasing its revenue base. The company also focuses on operational efficiencies and cost management to enhance profitability. While partnerships and joint ventures can play a role in its growth strategy, the primary source of income remains the rental payments from its tenants.
Minto Apartment Real Estate Investment Trust Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q3-2024)
| % Change Since: 3.15%|
Next Earnings Date:Aug 13, 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.Q3-2024 Updates
Positive Updates
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%.
Negative Updates
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.Minto Apartment Real Estate Investment Trust Financial Statement Overview
Summary
Minto Apartment REIT shows solid financial performance with strong revenue growth and recovery in profitability. The balance sheet is healthy with moderate leverage, and cash flow remains robust, supporting dividends.Income Statement
Minto Apartment REIT demonstrates solid revenue stability with a modest revenue growth of 9.18% from 2021 to 2022. The gross profit margin is strong at approximately 63.96% in TTM, indicating efficient property management. The net profit margin has shown recovery to 62.09% in TTM after a loss in 2023, reflecting improved profitability. EBIT and EBITDA margins have also seen significant improvement, showcasing enhanced operational efficiency.75
Positive
Balance Sheet
The balance sheet is relatively healthy with a debt-to-equity ratio of 0.81 in TTM, indicating moderate leverage typical for a REIT. Return on Equity is strong at 8.79%, suggesting effective use of equity. The equity ratio of 42.92% in TTM points to a stable financial structure, although slightly lower than previous years, due to increased liabilities.70
Positive
Cash Flow
Cash flow from operations remains robust, with a healthy operating cash flow to net income ratio of 0.87 in TTM. Free cash flow growth is positive, although slightly lower than previous periods, reflecting stable cash generation capability. The free cash flow to net income ratio of 0.79 indicates strong cash conversion, supporting dividend payments typical in the REIT sector.68
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 |
| EBITDA | 90.93M | -82.39M | 86.65M | 112.42M | 121.94M |
| Net Income | 63.24M | -116.66M | 388.88M | 54.24M | 96.17M |
Balance Sheet | |||||
| Total Assets | 2.65B | 2.70B | 2.73B | 2.44B | 2.20B |
| Cash, Cash Equivalents and Short-Term Investments | 5.88M | 3.74M | 5.32M | 2.85M | 2.61M |
| Total Debt | 910.98M | 930.05M | 903.48M | 681.67M | 630.03M |
| 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
Negative
13.77
Price Trends
14.32
Negative
13.62
Positive
13.46
Positive
Market Momentum
-0.15
Positive
39.35
Neutral
10.10
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MI.UN, the sentiment is Negative. The current price of 13.77 is below the 20-day moving average (MA) of 14.30, below the 50-day MA of 14.32, and above the 200-day MA of 13.46, indicating a neutral trend. The MACD of -0.15 indicates Positive momentum. The RSI at 39.35 is Neutral, neither overbought nor oversold. The STOCH value of 10.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MI.UN.
Minto Apartment Real Estate Investment Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | C$2.15B | 3.84 | 19.03% | 4.01% | 5.77% | 108.23% | |
68 Neutral | C$931.79M | 9.94 | 4.86% | 4.24% | 3.93% | -29.40% | |
68 Neutral | C$507.92M | 5.72 | 9.03% | 3.75% | -0.29% | ― | |
67 Neutral | C$1.85B | ― | -7.49% | 2.96% | 2.52% | -573.45% | |
64 Neutral | C$1.99B | 4.20 | -3.29% | 5.13% | 3.04% | -44.21% | |
62 Neutral | C$661.81M | ― | -10.24% | 4.62% | 4.39% | 56.33% | |
58 Neutral | C$571.70M | ― | -43.99% | 65.32% | -7.34% | -966.70% |
* Real Estate Sector Average
Performance Comparison
TSE:MI.UN
Minto Apartment Real Estate Investment Trust
13.77
-1.46
-9.59%
TSE:KMP.UN
Killam Apartment REIT Un
17.82
-0.23
-1.27%
TSE:ERE.UN
European Residential Real Estate ate Investment Trust
2.46
0.88
55.70%
TSE:MRG.UN
Morguard NA REIT UN
17.81
1.89
11.87%
TSE:IIP.UN
InterRent REIT Un
13.23
1.35
11.36%
TSE:HOM.UN
BSR Real Estate Investment Trust
16.96
0.49
2.98%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.