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Despite the raging pandemic and economic downturn, Canadian home sales were historically strong in 2020. In October and November, actual home sales activity (not seasonally adjusted) was up over 32 per cent year-over-year (YoY), according to the Canadian Real Estate Association. In 2020 alone, nearly 511,449 homes traded hands over Canadian MLS® Systems, up 10.5 per cent over first 11 months YoY.
This rise in housing demand and real estate prices, even as wages failed to keep pace this year, is being viewed as alarming by many market analysts, some even terming it a “bubble”.
The S&P/TSX Capped Real Estate Index has declined by over 13 per cent year-to-date (YTD). However, index shows a rebound in the last three months, gaining over 9 per cent quarter-to-date (QTD).
Here’s a quick look at the top real estate stocks of 2020:
FirstService Corporation (TSX:FSV)
Stocks of this C$ 7.8-billion real estate company has advanced by 44+ per cent in 2020, outperforming the benchmark TSX real estate index. The stock has a current price-to-earnings (P/E) ratio of 65 and price-to-cashflow ratio of 24.2. It offers a return on equity (RoE) of 15.92 per cent and return on assets (RoA) of 3.39 per cent, as per TMX data. The company announced a quarterly dividend of US$ 0.165 and yields nearly 0.5 per cent.
Colliers International Group Inc. (TSX:CIGI)
Colliers stock is up 15 per cent this year. The stock has rebounded by over 120 per cent since its March lows. The company’s current market cap is C$ 4.5 billion and announced semi-annual dividends of US$ 0.05. The stock holds a P/E ratio of 56.4, P/CF ratio of 12.4 and price-to-book (P/B) ratio of 6.8, shows the TMX data. The RoE and RoA stands at 12.93 per cent and 2.2 per cent, respectively.
@Kalkine Image 2020
Altus Group Limited (TSX: AIF)
Stocks of this Canadian real estate solutions provider firm are up by 30 per cent year-to-date (YTD). Altus’ current market cap is C$ 2 billion. The company offers dividend of C$ 0.15, and currently holds a yield of 1.217 per cent. The stock offers a RoE and RoA of 4.63 per cent and 2.32 per cent, respectively. The P/E ratio stands at 115.3 and P/CF ratio of 32, according to TMX data.
Tricon Residential Inc. (TSX:TCN)
Tricon stocks are up 8 per cent this year and have rebounded by over 100 per cent since its lowest point in March. The C$ 2-billion company holds a dividend yield of 2.45 per cent and pays C$ 0.07 quarterly dividend. Its net income surged by 74 per cent YoY to 58.1 million in third quarter of 2020. The stock holds a P/E ratio of 21.6 and P/CF ratio of 11.10.
NorthWest Healthcare Properties REITS (TSX: NWH.UN)
The Real Estate Investment Trust (REIT) units have advanced by 5 per cent this year and has rebounded by over 90 per cent since the pandemic-led crash in March. The company pays a monthly dividend of C$ 0.067 and currently yields 6.37 per cent. The REIT completed its $3-billion European joint venture in the third quarter of 2020. The stock offers an RoA of 12.56 per cent and P/E ratio of 14.3.
