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Summary
- About 36 per cent of young Canadians have given up their dreams of owning a home, as per a poll conducted by the Royal Bank of Canada.
- But while some dreams may have been punctured, certain real estate stocks have been performing well on the Toronto Stock Exchange (TSX) in the wake of the rising housing prices.
- Stocks of real estate services company FirstService grew by about 73 per cent in the last one year and by about 16 per cent year-to-date (YTD).
As real estate prices hit an all-time high in Canada, about 36 per cent of Canadians under the age of 40 have given up on their dreams of owning a house, as per a poll conducted by the Royal Bank of Canada (TSX:RY). Commenting on the present situation of the housing market, Amit Sahasrabudhe, a senior official at the RBC, said that low mortgage rates and market volatility have created a difficult situation for home buyers. But while some dreams may have been punctured, certain real estate stocks have been performing well on the Toronto Stock Exchange (TSX) in the wake of the rising housing prices, such as FirstService Corporation (TSX:FSV) and SmartCentres Real Estate Investment Trust (TSX:SRU.UN).
Let’s take a peek at these real estate companies and their recent stock performances.
FirstService Corporation (TSX:FSV)
FirstService Corporation (TSX:FSV), a public real estate services company, currently has a market cap of C$ 8.8 billion and holds a price-to-book (P/B) ratio of 10.64, as per TMX. The real estate stock offers a 15.53 per cent return on equity (ROE) and a 4.03 per cent return on assets (ROA).
©Kalkine Group 2021
FirstService also offers a dividend of US$ 0.182 on a quarterly basis and posts a dividend yield of 0.47 per cent, according to TMX data.
First Service stock grew about 73 per cent in the last year and roughly 16 per cent year-to-date (YTD). The company reported a revenue of US$ 775.1 million, up by 15 per cent year-over-year (YoY), in its fourth-quarter results ending December 31, 2020.
The real estate services company posted a 25 per cent YoY increase in its adjusted EBITDA of US$ 79.9 million in Q4 2020, while its adjusted earnings per share (EPS) stood at US$ 1.02 per share.
SmartCentres Real Estate Investment Trust (TSX:SRU.UN)
Canadian firm SmartCentres Real Estate Investment Trust holds a P/B ratio of 1.103 and a return on equity of 1.66 per cent, as per TMX data. The C$ 4.04-billion market cap trust offers a monthly dividend of C$ 0.154 and has a dividend yield of 6.66 per cent.
SmartCentres’ stocks climbed about 26 per cent over the past year and almost 21 per cent YTD.
©Kalkine Group 2021
In its latest financial results, SmartCentres reported that it was able to repay some C$ 120.9 million of its secured debt and about C$ 474.4 million of its unsecured debt last year.
