Minto Apartment Real Estate Investment Trust (MI.UN) AI Stock Analysis

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Minto Apartment Real Estate Investment Trust

(TSX:MI.UN)

Rating:71Outperform

Price Target:

C$15.50

▲(7.94%Upside)

Minto Apartment REIT's strong financial performance and attractive valuation are the primary factors contributing to its score. The stock displays positive technical momentum, adding to its investment appeal. The absence of earnings call data and corporate events does not detract from the overall assessment.

Positive Factors

Leasing and Revenue

The large spread between in-place and market rental rates allows for continued revenue growth.

Unit Repurchases

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.

Valuation

Minto currently trades at an implied cap rate of 6.3% or a 27.2% discount to the NAV estimate, indicating potential undervaluation.

Negative Factors

Interest Rates

The lack of growth in FFO per unit was impacted by greater interest expense from refinancing debt at higher interest rates.

Operating Expenses

Operating expense inflation of 5.9% contributed to a decrease in SP-NOI and margin contraction.

Supply and Demand

It is difficult to see a near-term catalyst, particularly with continued pressure on rental rates and continued new supply being completed.

Minto Apartment Real Estate Investment Trust (MI.UN) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$545.60M

Dividend Yield3.53%

Average Volume (3M)186.63K

Price to Earnings (P/E)6.0

Beta (1Y)0.91

Revenue Growth-0.29%

EPS GrowthN/A

CountryCA

Employees252

SectorReal Estate

Sector Strength63

IndustryREIT - Residential

Share Statistics

EPS (TTM)0.24

Shares Outstanding37,889,236

10 Day Avg. Volume301,577

30 Day Avg. Volume186,626

Financial Highlights & Ratios

PEG Ratio0.14

Price to Book (P/B)0.44

Price to Sales (P/S)0.00

P/FCF Ratio6.29

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$16.25

Price Target Upside13.16% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

Minto Apartment Real Estate Investment Trust Business Overview & Revenue Model

Company DescriptionMinto Apartment Real Estate Investment Trust, an open-ended real estate investment trust, owns and operates a portfolio of income-producing multi-residential rental properties located in Canada. As of December 31, 2020, its portfolio consists of interests in 29 multi-residential rental properties, including three mixed-use residential apartment and commercial buildings in Toronto, Ottawa, Montréal, Calgary, and Edmonton. Minto Apartment Real Estate Investment Trust was founded in 2018 and is headquartered in Ottawa, Canada.

How the Company Makes MoneyMinto Apartment Real Estate Investment Trust generates revenue primarily through rental income from its portfolio of multi-residential properties. The company owns and manages a diverse range of apartment buildings, and the rent collected from tenants constitutes the primary revenue stream. Additionally, Minto Apartment REIT may engage in strategic acquisitions and developments to expand its property portfolio, thereby increasing potential rental income. Other sources of revenue can include ancillary services provided to tenants and the potential appreciation in property values, which can contribute to capital gains. The company's earnings are also influenced by its ability to maintain high occupancy rates and manage operational costs efficiently. Strategic partnerships in property management and development further contribute to its revenue generation.

Minto Apartment Real Estate Investment Trust Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q3-2024)

% Change Since: 6.92%|

Next Earnings Date:Aug 12, 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 strong financial performance with stable revenue and improving profitability, as evidenced by significant improvements in net profit margin and operational efficiency. The balance sheet indicates moderate leverage typical for a REIT but remains stable, supporting growth and dividends. Cash flow is robust, with good cash conversion ratios, underpinning financial stability.

Income Statement

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
157.36M	157.09M	157.93M	143.79M	123.55M	124.93M
	Gross Profit
100.66M	100.57M	99.17M	87.80M	76.25M	78.62M
	EBIT
211.34M	92.09M	23.17M	87.80M	76.25M	121.94M
	EBITDA
111.22M	90.93M	-82.39M	86.65M	112.42M	121.94M
	Net Income Common Stockholders
97.70M	63.24M	-116.66M	388.88M	54.24M	96.17M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.92M	5.88M	3.74M	5.32M	2.85M	2.61M
	Total Assets
2.59B	2.65B	2.70B	2.73B	2.44B	2.20B
	Total Debt
895.51M	910.98M	930.05M	903.48M	681.67M	630.03M
	Net Debt
890.59M	905.10M	926.31M	898.15M	678.82M	627.42M
	Total Liabilities
1.48B	1.53B	1.62B	1.52B	1.43B	1.35B
	Stockholders Equity
1.11B	1.12B	1.08B	1.21B	1.01B	850.22M
Cash Flow		Free Cash Flow
76.99M	95.87M	44.88M	33.30M	72.12M	69.86M
	Operating Cash Flow
84.88M	95.87M	92.97M	82.50M	72.12M	69.86M
	Investing Cash Flow
-9.59M	16.28M	-86.93M	-125.69M	-153.11M	-51.24M
	Financing Cash Flow
-77.76M	-110.01M	-7.62M	45.66M	81.24M	-17.94M

Minto Apartment Real Estate Investment Trust Technical Analysis

Technical Analysis Sentiment

Positive

Last Price14.36

Price Trends

50DMA

13.13

Positive

100DMA

13.07

Positive

200DMA

13.88

Positive

Market Momentum

MACD

0.39

Negative

RSI

68.22

Neutral

STOCH

89.29

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MI.UN, the sentiment is Positive. The current price of 14.36 is above the 20-day moving average (MA) of 13.34, above the 50-day MA of 13.13, and above the 200-day MA of 13.88, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 68.22 is Neutral, neither overbought nor oversold. The STOCH value of 89.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MI.UN.

Minto Apartment Real Estate Investment Trust Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KMP.UN	81 Outperform	C$2.33B	3.67	22.26%	3.64%	5.77%	108.23%
MRG.UN	75 Outperform	C$971.30M	8.68	5.83%	4.07%	3.85%	-31.81%
MI.UN	71 Outperform	C$545.60M	5.99	9.03%	3.53%	-0.29%	―
IIP.UN	71 Outperform	C$1.91B	―	-7.00%	2.84%	2.52%	-573.45%
HOM.UN	66 Neutral	C$972.66M	―	-11.97%	4.24%	4.39%	56.33%
ERE.UN	64 Neutral	C$581.04M	―	-37.33%	6.25%	-7.34%	-966.70%
Sector *	61 Neutral	$2.82B	10.89	0.42%	8438.96%	5.74%	-20.95%

* Real Estate Sector Average

Performance Comparison

TSE:MI.UN

Minto Apartment Real Estate Investment Trust

14.37

-0.47

-3.17%

TSE:ERE.UN

European Residential Real Estate ate Investment Trust

2.50

1.18

89.39%

TSE:IIP.UN

InterRent REIT Un

13.60

2.00

17.24%

TSE:KMP.UN

Killam Apartment REIT Un

19.45

2.71

16.19%

TSE:MRG.UN

Morguard NA REIT UN

18.42

3.44

22.96%

TSE:HOM.UN

BSR Real Estate Investment Trust

18.00

3.16

21.29%

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.