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Morguard NA REIT UN (TSE:MRG.UN)
TSX:MRG.UN
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Morguard NA REIT UN
(TSX:MRG.UN)
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Select Model
Rating:69Neutral
Price Target:
C$20.00
▲(11.23% Upside)
Morguard NA REIT UN demonstrates solid financial performance with strong revenue growth and efficient operations. However, challenges in declining profit margins and cash flow growth are notable. The stock's valuation is attractive with a reasonable P/E ratio and a good dividend yield, but technical indicators suggest a lack of strong momentum.
Morguard NA REIT UN (MRG.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$943.73M
Dividend Yield4.22%
Average Volume (3M)18.74K
Price to Earnings (P/E)10.1
Beta (1Y)0.77
Revenue Growth3.93%
EPS Growth-29.40%
CountryCA
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Residential
Share Statistics
EPS (TTM)0.55
Shares Outstanding35,003,326
10 Day Avg. Volume13,986
30 Day Avg. Volume18,744
Financial Highlights & Ratios
PEG Ratio-0.54
Price to Book (P/B)0.31
Price to Sales (P/S)1.81
P/FCF Ratio6.38
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$21.33Price Target Upside18.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Morguard NA REIT UN Business Overview & Revenue Model
Company DescriptionThe 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 MoneyMorguard NA REIT UN generates revenue primarily through rental income from its portfolio of residential properties. The company's key revenue streams include leasing apartments and multi-suite residential units to tenants, which provides a steady and predictable income flow. Additionally, the REIT seeks to enhance its earnings through strategic acquisitions and dispositions of properties, aiming to optimize its portfolio for maximum profitability. Morguard NA REIT UN also benefits from property management fees and services offered to tenants, further contributing to its overall revenue. The company's earnings are influenced by factors such as occupancy rates, rental rate growth, and the effective management of operating expenses. Significant partnerships with property developers and other stakeholders can also play a role in expanding its portfolio and enhancing its market position.
Morguard NA REIT UN Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q3-2024)
| % Change Since: |
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong asset growth and rent increases in Canada offset by significant net loss and decreased occupancy in the U.S. Interest expense rise and operational challenges contributed to a cautious outlook.Q3-2024 Updates
Positive Updates
Increase in Total Assets
Total assets increased to $4.4 billion in Q3 2024, up from $4.1 billion at the end of 2023, due to a fair value increase on real estate properties and foreign exchange rate fluctuations.
Strong Canadian Rent Growth
Average monthly rent in Canada increased by 6% compared to 2023, with a 24.1% AMR growth on suite turnover.
Increase in Annual Cash Distribution
Annual cash distribution increased by $0.02 per unit, a 2.7% increase, to $0.76 per unit.
Negative Updates
Significant Net Loss
Net loss of $18.8 million for Q3 2024 compared to net income of $39.2 million in 2023, primarily due to noncash items such as a $99.7 million increase in fair value loss on Class B LP units.
Decrease in U.S. Occupancy
U.S. occupancy decreased to 91.7% from 93.7% in 2023, driven by turnover during the summer leasing season.
Interest Expense Increase
Interest expense increased by $5.5 million compared to Q3 2023, primarily due to higher principal and interest rates.
Decrease in Net Operating Income
IFRS net operating income decreased by $0.4 million or 0.7% compared to 2023, with NOI in the U.S. decreasing by 4%.
Company Guidance
During the Q3 2024 earnings call for MRG.UN.TO, several key financial metrics and guidance were provided. The REIT's total assets increased to $4.4 billion, up from $4.1 billion at the end of 2023, due to factors including a fair value increase in real estate properties. They reported $103.3 million in cash and a $1.7 billion long-term debt. Mortgage payables have a weighted average term of 5.1 years and an interest rate of 3.87%. The debt-to-gross book value ratio slightly increased to 38.9%. The REIT repurchased about 1.1 million units under the NCIB at an average price of $16.94, with an IFRS net asset value per unit at $41.30. The annual cash distribution was increased by 2.7% to $0.76 per unit. Despite a net loss of $18.8 million, mostly due to non-cash items, the REIT saw a net operating income of $52 million, a slight decrease from the previous year. In Canada, the average monthly rent rose by 6% to $1,754, while in the U.S., it increased by 2% to USD 1,911. Canadian occupancy was at 97.8%, and U.S. occupancy at 91.7%. The REIT also completed $31.8 million in capital expenditures. Looking ahead, the REIT plans to continue with its share buyback strategy and is exploring acquisition opportunities, particularly where cap rates are favorable.Morguard NA REIT UN Financial Statement Overview
Summary
Morguard NA REIT UN presents a stable financial position with strong revenue growth and cash generation. Profitability is robust, despite EBIT fluctuations. The balance sheet shows moderate leverage with a declining ROE. Cash flow is strong with efficient cash conversion, offsetting balance sheet concerns.Income Statement
The company shows consistent revenue growth from 2019 to 2024, achieving a revenue growth rate of 3.8% in 2024. Gross profit margin stands at 46.27%, and net profit margin at 29.6% in 2024, indicating strong profitability. However, the EBIT margin is notably fluctuating, with a substantial improvement to 52.72% in 2024 from negative levels in 2022. This suggests recovery in operational efficiency.75
Positive
Balance Sheet
The debt-to-equity ratio is 0.89, indicating moderate leverage, which is typical for REITs. Return on equity (ROE) is 5.09%, showing a decline from previous years, suggesting weakening profitability on equity. The equity ratio is 43.78%, indicating a solid equity base, though slightly lower compared to peers.70
Positive
Cash Flow
The company has demonstrated strong free cash flow growth, with consistent increases in operating cash flow. The operating cash flow to net income ratio of 0.96 suggests efficient cash generation relative to net income. However, the free cash flow to net income ratio also stands at 0.96, indicating a tight correlation between net income and cash flow.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 352.49M | 344.19M | 331.62M | 278.49M | 245.57M | 248.68M |
| Gross Profit | 168.43M | 186.38M | 180.24M | 131.86M | 115.10M | 120.30M |
| EBITDA | 171.75M | 179.27M | 254.03M | 149.68M | 68.22M | 139.29M |
| Net Income | 95.05M | 101.86M | 176.34M | 219.28M | 242.09M | 175.22M |
Balance Sheet | ||||||
| Total Assets | 4.54B | 4.57B | 4.10B | 3.93B | 3.47B | 3.08B |
| Cash, Cash Equivalents and Short-Term Investments | 66.00M | 51.26M | 17.82M | 14.64M | 26.56M | 27.30M |
| Total Debt | 1.77B | 1.79B | 1.56B | 1.48B | 1.38B | 1.31B |
| Total Liabilities | 2.46B | 2.46B | 2.14B | 2.08B | 1.91B | 1.74B |
| Stockholders Equity | 1.97B | 2.00B | 1.85B | 1.75B | 1.48B | 1.27B |
Cash Flow | ||||||
| Free Cash Flow | 92.85M | 97.50M | 88.97M | 75.17M | 63.70M | 50.13M |
| Operating Cash Flow | 92.85M | 97.50M | 88.97M | 75.17M | 63.70M | 50.13M |
| Investing Cash Flow | -64.51M | -59.40M | -209.01M | -11.06M | -31.30M | -28.06M |
| Financing Cash Flow | -89.48M | -6.74M | 120.84M | -78.88M | -33.05M | -11.57M |
Morguard NA REIT UN Technical Analysis
Negative
17.98
Price Trends
18.30
Negative
18.20
Negative
17.39
Positive
Market Momentum
-0.09
Positive
40.14
Neutral
17.41
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 17.98 is below the 20-day moving average (MA) of 18.21, below the 50-day MA of 18.30, and above the 200-day MA of 17.39, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 40.14 is Neutral, neither overbought nor oversold. The STOCH value of 17.41 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | C$500.04M | 7.23 | 5.89% | 3.73% | -0.69% | ― | |
69 Neutral | C$943.73M | 10.08 | 4.86% | 4.22% | 3.93% | -29.40% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | C$797.17M | 9.75 | 5.58% | 8.72% | -26.40% | ― | |
58 Neutral | C$1.87B | ― | -7.49% | 2.95% | 1.56% | -9446.15% | |
55 Neutral | $580.67M | ― | -3.37% | 9.92% | -21.40% | 71.00% | |
49 Neutral | C$648.15M | ― | -10.24% | 4.75% | -1.10% | 61.83% |
* Real Estate Sector Average
TSE:MRG.UN
Morguard NA REIT UN
17.98
-0.12
-0.66%
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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.