3 MidCap Real Estate Stocks To Buy As Canadian Housing Market Heats Up

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Summary

  • The Canadian housing market has been booming for the past few months leading to experts speculating a bubble and calling for cooling measures.
  • The country's average home selling price up by 31.6 per cent year-over-year (YoY) in March, as per Canadian Real Estate Association.
  • If you’re on the lookout for real estate stocks, you might consider exploring 3 stocks in this article.

Canadian housing starts hit a new record in March and increased by 21.6 per cent, the Canadian Mortgage and Housing Corporation (CMHC) said in its latest report. Housing starts increased to 335,200 units (seasonally adjusted annualized rate of), breaching analysts' expectations of 250,000 units.

The Canadian housing market has been booming for the past few months with experts now calling for measures to cool down the market. The Canadian Real Estate Association (CREA) said earlier this month that the country's average home selling price increased by 31.6 per cent year-over-year (YoY) in March, an all-time high.

Since the housing sector is breaking all records, instead of buying properties, investors can choose to explore real estate stocks for long term gains. Here are three real estate stocks you might consider exploring in 2021:

Colliers International Group Inc. (TSX:CIGI)


The Colliers International Group Inc. (TSX:CIGI) offers real estate services in investment management in over 60 countries and has a market cap of C$ 5 billion. The stock’s price-to-book (P/B) ratio is 7.109. It holds 8.6 per cent return on equity (ROE) and 1.52 per cent return on assets (ROA), as per the TMX data.

The company distributes a dividend of US$ 0.05 semi-annually and it currently registers a dividend yield of 0.098 per cent. The stock grew 76.4 per cent in a year and 13.7 per cent year-to-date (YTD). The scrips were priced at C$ 131.49 at market close on April 16, down from their 52-week high of C$ 142.47 (February 12, 2021).

In Q4 2020, the company's revenue declined by 2 per cent YoY to US$ 913.7 million. However, the adjusted EBITDA was US$ 154.9 million, an increase of 7 per cent from Q4 2019. During the same period, the cash and cash equivalents increased to US$ 156.6 million, up from US$ 114.9 million.

Source: Pixabay

RioCan Real Estate Investment Trust (TSX:REI.UN)


With a market cap of C$ 6.4 billion, the RioCan Real Estate Investment Trust (TSX:REI.UN) owns and develops retail and residential properties in Canada. It holds a P/B ratio of 0.83, according to TMX data. RioCan distributes a dividend of C$ 0.08 on a monthly basis. The dividend yield is 4.752 per cent.

In a year the company's stock surged by 21.5 per cent and in 2021, it grew by 20.6 per cent. On April 16, it touched its 52-week high of C$ 20.33 before settling down at C$ 20.20 at market close.

The company's net income was C$ 65.6 million in Q4 2020, down from C$ 150.8 million in Q4 2019. However, the company managed to maintain its ample liquidity and increased it to C$ 1.5 billion, up from C$ 809.8 million in the fourth quarter of the previous year.

Summit Industrial Income REIT (TSX:SMU.UN)


The C$ 2.6-billion REIT is involved in the commercial leasing of real estate properties..

©Kalkine Group 2021

Summit Industrial distributes a C$ 0.045 dividend on a monthly basis.

The stock’s P/B ratio of 1.35. It offers 12.12 per cent ROE and 6.95 per cent ROA. The current dividend yield is 3.579 per cent.

The stock grew by about 55 per cent in the last 12 months and 12.2 per cent YTD. The company's 2020 net income was C$ 206.5 million, an increase of about 40 per cent YoY. For the same period, the worth of total assets increased to C$ 3 billion, up from C$ 2.5 billion.

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