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Opinions Paul Gardner, CFA
Mainstreet Equity CorpMEQ.TOTOP PICKApr 25, 2012
Paul Gardner, CFAStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Premium contentWe reiterate this Calgary based multi-family property manager -- a play on the recovery of the Alberta economy. We like that cash reserves are growing, while debt is retired and shares are bought back. It still trades under book value. We continue to recommend a stop at $125, looking to achieve $166 -- upside potential of 22%. Yield 0%
(Analysts’ price target is $166.67)Premium contentWe again reiterate MEQ as a TOP PICK. Latest earnings reported income up 22%, on a 18% increase in revenues -- meaning margins are growing despite inflationary pressures. We like that cash reserves are growing, while debt is retired and shares bought back. We continue to recommend a stop at $125, looking to achieve $166 -- upside potential of 21%. Yield 0%.
(Analysts’ price target is $166.67)MEQ operates as a real estate corporation focusing on managing residential rental apartments and is now trading at 27.6x times' Forward P/E, but only at 1.0x Book value. In the last five years, MEQ’s revenue growth has been quite consistent, around 12% on average. Like other real estate companies, the balance sheet is leveraged, with net debt of $1.5B. The net debt/EBITDA is currently around 14.5x. MEQ reinvested heavily into acquiring new properties. As a result, the company has had no dividend payments and limited shares repurchase over the last few years.
We think MEQ has the potential to be a compounder, trading at 1.0x Book value is also an attractive valuation, but the leverage levels need to be monitored carefully, as the debt is quite high. We would be comfortable with this name for a three-year+ timeframe given its cheap valuation and consistent revenue growth.
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Very well run with a long track record. Is one of the best compounding stocks in Canada that nobody knows. It returns 20% annually for the last 20 years. They played Covid perfectly by buying companies and locking in their debt at 2% over 10 years. Are well positioned given Canada's housing shortages with low vacancies and more immigrants coming.
(Analysts’ price target is $163.33)
Jordan ZinbergPremium contentWe reiterate MEQ, with a portfolio of over 15,000 residential units in Western Canada, as a TOP PICK. Recently reported earnings showed double digit growth for the sixth consecutive quarter for all of its key growth metrics. Funds from operations were up 25%. Cash reserves grew, while retiring debt and buying back shares. We continue to recommend a stop at $125, looking to achieve $163 -- upside potential of 19%. Yield 0%
Premium contentAttractive long-term assets. Calgary-Edmonton based. Active in their portfolios. Looks extremely good from an ROC metric. Pay attention to the apartment sector, it's a good one right now.
James TelfserPremium contentMEQ operates 15,800 multi-family rental units in Western Canada. Recently reported income beat expectations for the fifth consecutive quarter as funds from operations were up 26%. The company reports it is benefitting from the rising immigration to Canada, especially in Alberta and BC. It trades under book value an at 10x earnings. We recommend a stop-loss at $105, looking to achieve $162 — upside potential over 27%. Yield 0%
(Analysts’ price target is $161.67)MEQ continues to chug along, producing fairly steady EPS growth.
With a 16% YTD gain, the stock is somewhat expensive for the sector, at 22X earnings.
It is likely getting more attention as market cap has breached $1B, and there are few non-REIT real estate plays in Canada.
There is no dividend but three analysts cover it.
Insiders own 50% and are certainly committed.
Revenue rose 13% last year and vacancies improved.
Debt is quite high, but shares have done very well: up more than 6-fold since 2016.
We would consider it expensive, but otherwise pretty good for a real estate stock.
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Specializes in acquiring and managing small apartment buildings in Western Canada.
Not a REIT, rather a corporation that retains capital.
16,000 doors currently with minimal equity dilution.
18% compound rate of return.
Sub 2% debt levels that were guaranteed at low interest rate levels.
Rental rate increases will positively affect business.
Jordan ZinbergJordan ZinbergJordan Zinberg
