Could these 5 Canadian real estate stocks add growth to your portfolio? - Kalkine Media

June 01, 2022 10:39 AM EDT | By Sundeep Radesh
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  • On Wednesday, June 1, the Bank of Canada is expected to hike the interest rate and this may affect mortgages
  • Home prices in Canada fell six per cent in April to C$$746,000, which is still too much for many Canadians who dream of owning a first home
  • All these stocks have gained in May, even with the interest rate hike expected

On Wednesday, June 1, the Bank of Canada is expected to hike the interest rate and this may affect mortgages.

Home prices in Canada fell six per cent in April to C$$746,000. That is still too much for many Canadians who dream of owning a first home.

One way of being part of the housing market, if you don’t have all that money lying around, is by investing in real estate stocks.

Some real estate stocks can bring growth to a portfolio given the assumption that prices will appreciate long term. Some can also indirectly bring rental income.

So, let’s look at some Canadian real estate stocks.

Madison Pacific Properties Inc (TSX:MPC)

It owns and operates commercial properties in Western Canada. On Tuesday, May 31, it closed at C$7.07.

The stock has gained 38 per cent in 12 months and is even in the green year-to-date (YTD), up over one per cent.  In the last month it has returned about two per cent.

It has a price-to-earnings (P/E) ratio of 8.2. This implies that for every C$8.20 invested, a gain of C$1 is made.

Its dividend yield is about 1.5 per cent.

Imperial Equities Inc (TSXV:IEI)

Most of Imperial’s revenue is rental income from the industrial sector. IEI closed at C$4.85 Monday and its has gained six per cent in a month.

Over the last year, it has returned 23 per cent. The stock’s dividend yield is 1.7 per cent and its P/E ratio is 5.5.

Colliers International Group Inc (TSX:CIGI)

Colliers needs little introduction; it operates in over 60 countries and has a market cap of C$6.5 billion.

CIGI costed C$153.93 at market close Tuesday. All though it has given away some of its gains in 2022, it is up 16 per cent over the last 12 months.

It’s in the red by 18 per cent YTD and has a dividend yield of 0.25 per cent. It rose nine per cent in May.

Also read: 5 TSX industrial stocks to watch as China’s manufacturing improves


Kadestone Capital Corp (TSXV:KDSX)

In addition to rental revenue, Kadestone also sells building materials. KDSX, on Tuesday, ended at C$1.65.

It has returned 10 per cent in 52 weeks. Its increase in May is also 10 per cent. It’s the only stock on this list that does not pay a dividend.

Bridgemarq Real Estate Services Inc (TSX:BRE)

Bridgemarq is a real estate services company. BRE last closed on Monday, when it stood at C$14.74.

The stock gained 5.4 per cent in May. It is down 10 per cent in 2022 but is on this list not only because it has rebounded recently but also because of its dividend payouts.

It has a dividend yield of 9.2 per cent.

Bottom line

The S&P/TSX Capped Real Estate Index has lost 3.2 per cent in May and 14.2 per cent YTD. However, all these stocks have gained in May, even with Bank of Canada’s interest rate hikes expected.

Except for Colliers, all their YTD performances have been better than the above-mentioned index too. Except for Kadestone, they all pay dividends which bring passive income.

Also read: Can summer cheer boost these 5 TSX midcap stocks?

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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