- With interest rate hikes possibly sending mortgages higher, an alternate way to invest in Canada’s housing market could be via the Toronto Stock Exchange
- Apart from DRM, which is in the C$50 region, all these stocks offer the opportunity to be part of Canada’s hot housing market for under C$20
- They also pay dividends
Canada’s housing prices have been skyrocketing and part of that is likely due to a shortage of supply. With interest rate hikes possibly sending mortgages higher, an alternate way to invest in Canada’s housing market could be via the Toronto Stock Exchange.
The S&P/TSX Capped Real Estate Index is down nearly 15 per cent year-to-date (YTD). So, with the sector on the dip, lets look at some interesting TSX-listed real estate stocks.
PRO Real Estate Investment Trust (TSX:PRO.UN)
PRO’s stock closed at C$6.84 Monday, May 3, after it fell nearly four per cent. It is in the green on a YTD basis (up 0.7 per cent) but it is down nearly six per cent over the last month.
It spiked to a 52-week high of C$7.64 on April 19 and is currently over 10 per cent cheaper, just two weeks later.
PRV’s price-to-earning (P/E) ratio is 4.9, which essentially is the ratio for dollars invested for a C$1 profit. PRV’s dividend yield is 6.58 per cent.
The stock is up 6.4 per cent in 12 months.
Nexus Real Estate Investment Trust (TSX:NXR.UN)
Nexus’s stock is down about five per cent YTD, but it has zoomed 35 per cent in the last year.
What is more is that it is on the rebound by over one per cent in the last month despite falling over 11 per cent in the last two trading sessions.
For most of this year it saw a slow but steady climb but recently has plunged, taking its YTD return into the negative territory.
Its stock closed Monday at C$12.03 and it has a P/E ratio of 5.9. The stock’s dividend yield is 6.7 per cent.
Tricon Residential Inc (TSX:TCN)
The rental housing company saw its stock close at C$18.02 Monday. It has risen over 38 per cent in a year.
This year, TCN too steadily rose but since late March it has been on a downward trajectory, its YTD loss is nearly seven per cent.
On March 23, it touched C$21.50, its 52-week high. Its current purchase price is 16.5 per cent lesser.
TCN’s P/E ratio is 7.2 and its dividend yield is 1.6 per cent.
DREAM Unlimited Corp (TSX:DRM)
DRM is another stock that is in the green on a YTD basis, up over 17 per cent. Over the last year, it has rocketed over 98 per cent.
DRM closed Monday at C$45.49 over 10 per cent below its 52-week high of C$50.71 that it saw on March 17. It has largely been on a trajectory of growth this year but began to give away some gains since the second week of April.
The stock’s P/E ratio of 18.1, however, is higher than those mentioned before it. Its dividend yield stands at 0.88 per cent.
Morguard North American Residential Real Estate Investment Trust (TSX:MRG.UN)
After falling over 11 per cent in the last month, Morguard’s stock’s loss on a YTD basis stands at 0.68 per cent.
In late January, it sank seven per cent in three days before beginning a steep climb, reaching its 52-week high of C$20.5 on March 18.
Recent losses brought its closing price to C$17.59 Monday. Its P/E ratio is 1.8 and dividend yield nearly four per cent.
The stock is up 12 per cent over a year.
The above stocks may be considered to be on the dip since they have climbed earlier in the year and are lately down. Canada’s housing sector has much demand.
Morguard’s P/E ratio is the lowest of the lot. But it also seems to have witnessed volatility this year.
Apart from DRM, which is in the C$50 region, all these stocks offer the opportunity to be part of Canada’s hot housing market for under C$20. They also pay dividends.
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.