Morguard NA REIT UN (MRG.UN) AI Stock Analysis

• Market Cap: C$871.08M
• Dividend Yield: 4.41%
• Average Volume (3M): 19.78K
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.78
• Revenue Growth: 3.83%
• EPS Growth: 63.32%
• Country: CA
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Residential
• EPS (TTM): 0.56
• Shares Outstanding: 34,937,283
• 10 Day Avg. Volume: 17,597
• 30 Day Avg. Volume: 19,776
• PEG Ratio: -0.29
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 2.55
• P/FCF Ratio: 10.32
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$21.00
• Price Target Upside: 25.75% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 1.47
• Revenue Forecast (FY): C$361.84M

• Rating: 70 Outperform
• Price Target: C$18.50 ▲(10.78% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by solid financial performance tempered by weaker cash flow follow-through versus reported earnings. Technicals add support due to a clear uptrend and positive momentum indicators, while valuation contributes positively given the low P/E and healthy dividend yield.

Positive Factors

Steady Revenue Growth

Consistent top-line expansion over several years shows durable demand for the REIT’s residential product and growing portfolio scale. Sustained revenue growth supports recurring cash flows, enhances borrowing capacity, and provides a firmer base for long-term distributions and reinvestment.

Improved Leverage & Equity Base

A lower debt-to-equity ratio and a materially larger equity base reduce refinancing and solvency risk relative to earlier years. Stronger capitalization improves balance sheet flexibility for acquisitions, capital expenditures, and absorbing rate shocks, supporting stability over the medium term.

Recurring Rental Revenue Model

A core business built on recurring monthly rents from multi-suite residential assets creates predictable revenue streams and natural cash flow visibility. This structural pricing power and rental stickiness underpin long-term income generation and resilience versus cyclical commercial rents.

Negative Factors

Weak Cash Conversion

Material gap between reported net income and operating cash flow indicates earnings rely on non-cash items or timing effects. Weaker cash conversion raises risk for funding distributions, debt servicing, and capex without tapping external financing or asset sales, reducing margin for error across cycles.

Earnings Quality Concerns

Volatile margins and reliance on non-recurring gains in prior periods make underlying profitability harder to forecast. This impairs visibility into sustainable distributable earnings and increases risk that future reported profits will not translate into stable cash available for reinvestment or payouts.

Moderating Returns on Equity

Declining ROE signals reduced efficiency in converting equity into profit, which can constrain long-term value creation. If ROE remains subdued, the REIT may struggle to generate returns above its cost of capital, limiting growth funded by internal resources.

Morguard NA REIT UN Business Overview & Revenue Model

Company Description

The REIT is an unincorporated, open-ended real estate investment trust established under and governed by the laws of the Province of Ontario. The Units of the REIT trade on the Toronto Stock Exchange under the ticker symbol MRG.UN. With a strategic focus on the acquisition of high-quality multi-suite residential properties in Canada and the United States, the REIT maximizes long-term Unit value through active asset and property management. The REIT's portfolio is comprised of 13,275 residential suites (as of October 27, 2020) located in Alberta, Ontario, Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina, Virginia and Maryland with an appraised value of approximately $3.1 billion at September 30, 2020.

How the Company Makes Money

The REIT primarily makes money by generating rental income from its residential properties. Tenants pay monthly rent, which forms the core recurring revenue stream and is supported by ancillary rental-related income where applicable (null). The REIT’s profitability and cash flow are influenced by occupancy levels, rental rate changes/renewals, operating expenses (e.g., property operating costs, utilities where landlord-paid, repairs and maintenance, property taxes, insurance, and on-site management), and financing costs on mortgages and other debt. Additional earnings can come from net proceeds and gains on the disposition of properties and from changes in property values over time, which may support net asset value and financing capacity, though these are typically less predictable than recurring rental income. Information on specific significant partnerships or major third-party revenue arrangements is null.

Morguard NA REIT UN Financial Statement Overview

Summary

Solid revenue growth and strong reported profitability, supported by improved (but still meaningful) REIT-typical leverage. The main drag is weaker cash conversion versus net income and a year-over-year decline in 2025 free cash flow, which raises earnings-quality concerns.

Income Statement

Revenue shows steady expansion, rising from $248.7M (2020) to $354.6M (2025), with positive growth in the last two years (~3.8% in 2024 and ~8% in 2025). Profitability is strong on paper with high operating and net margins in 2024–2025; however, earnings quality looks less consistent over the cycle (very elevated net margins in 2021–2023 vs. lower/normalized levels in 2024–2025), suggesting results may be influenced by non-recurring items. Gross margin also compressed in 2025 versus 2024, which is a modest near-term headwind.

Balance Sheet

Leverage is meaningful but not extreme for a residential REIT: debt-to-equity sits around ~0.84–0.90 in 2022–2025 (improved versus ~1.03 in 2020), indicating a somewhat stronger capital structure than earlier years. Equity has grown over time (from ~$1.27B in 2020 to ~$1.99B in 2025), supporting balance sheet durability. Returns on equity have moderated to ~5% in 2024–2025 from higher levels earlier, implying less efficient value creation recently despite the larger asset base.

Cash Flow

Cash generation is positive, with operating cash flow of $87.8M in 2025 (and matching free cash flow in the data), but the trend weakened year-over-year (free cash flow down ~9% in 2025 after growth in 2023–2024). Operating cash flow covers only about one-third of net income in 2024–2025 (~0.33–0.34x), which points to a gap between reported earnings and cash generation and increases reliance on working capital timing or non-cash income sources. Overall, cash flow stability is adequate but not as strong as the income statement suggests.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	354.65M	344.19M	331.62M	278.49M	245.57M
Gross Profit	166.49M	186.38M	180.24M	131.86M	115.10M
EBITDA	197.05M	179.27M	254.03M	149.68M	68.22M
Net Income	102.97M	101.86M	176.34M	219.28M	242.09M
Balance Sheet
Total Assets	4.54B	4.57B	4.10B	3.93B	3.47B
Cash, Cash Equivalents and Short-Term Investments	114.63M	51.26M	17.82M	14.64M	26.56M
Total Debt	1.77B	1.79B	1.56B	1.48B	1.38B
Total Liabilities	2.43B	2.46B	2.14B	2.08B	1.91B
Stockholders Equity	1.99B	2.00B	1.85B	1.75B	1.48B
Cash Flow
Free Cash Flow	87.76M	97.50M	88.97M	75.17M	63.70M
Operating Cash Flow	87.76M	97.50M	88.97M	75.17M	63.70M
Investing Cash Flow	-71.30M	-59.40M	-209.01M	-11.06M	-31.30M
Financing Cash Flow	49.14M	-6.74M	120.84M	-78.88M	-33.05M

Morguard NA REIT UN Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MRG.UN, the sentiment is Negative. The current price of 16.7 is below the 20-day moving average (MA) of 17.86, below the 50-day MA of 18.13, and below the 200-day MA of 17.72, indicating a bearish trend. The MACD of -0.44 indicates Positive momentum. The RSI at 28.95 is Positive, neither overbought nor oversold. The STOCH value of 8.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MRG.UN.

Morguard NA REIT UN Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRG.UN	70 Outperform	C$871.08M	8.80	6.37%	4.41%	3.83%	63.32%
BEI.UN	66 Neutral	$3.34B	16.05	3.97%	2.46%	6.52%	-54.45%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
KMP.UN	61 Neutral	C$1.93B	69.28	0.93%	4.42%	6.19%	79.98%
IIP.UN	60 Neutral	C$1.86B	27.54	0.81%	3.01%	1.55%	-401.05%
MI.UN	60 Neutral	C$638.15M	-3.53	7.26%	3.87%	-1.21%	―
HOM.UN	46 Neutral	C$588.16M	-6.29	-3.64%	4.57%	-6.91%	82.31%