The Company in a Nutshell
- Minto operates a portfolio of 20 high-quality, multi-residential rental properties. Minto’s activities focus on urban areas (Toronto, Ottawa, Montreal, Calgary, and Edmonton). Minto pays a monthly dividend.
| Date Reviewed | 03/10/2025 |
| Company Name | Minto Apartment Real Estate Investment Trust |
| Symbol | MI.UN.TO |
| Sector | Real Estate |
| Industry | REIT - Residential |
| Beta | 1.34 |
| PRO Rating | 3 |
| Dividend Safety | 3 |
Business Model
Minto Apartment Real Estate Investment Trust (the REIT) is a Canada-based open-ended real estate investment trust. The REIT owns income-producing multi-residential properties located in urban markets in Canada. The REIT owns a portfolio of income-producing multi-residential rental properties located in Toronto, Montreal, Ottawa, and Calgary. Its portfolio includes 28 multi-residential rental properties comprising 7,726 suites strategically located across urban centers in Canada. Its properties include Richgrove, Martin Grove, Minto Yorkville, The ROE, Minto One80five, Parkwood Hills Garden Homes & Townhomes, Aventura, Huron, Seneca, Castleview, Skyline, The Carlisle, Castle Hill, Grenadier, Eleanor, Frontenac, Stratford, Laurier, Kaleidoscope, The Quarters, Rockhill Apartments, Leslie York Mills, High Park Village, Haddon Hall, Le 4300, 39 Niagara, The International, and Le Hill-Park.
| Current price | 13.12 |
| ROE | 5.75 % |
| ROIC | 0.00 % |
| Shareholder Yield | 1.70 % |
| 5-Yr Total Return | -25.15 % |
| 1-Yr Total Return | -10.45 % |
| Next Earnings Date | 05-06-25 |
Latest Quarter Information
What the CEO said:
We delivered very strong operating performance in 2024, posting record highs in Same Property Revenue, Same Property NOI, and Normalized FFO and AFFO per unit. In the fourth quarter, our business performance remained resilient. In addition, during the quarter and the first month of 2025, we executed on a series of accretive capital allocation strategies to build value for Unitholders. These included our entry into the Metro Vancouver market through the acquisition of a 50% managing ownership interest in Lonsdale Square, the sale of a non-core asset in Ottawa, the repayment of variable-rate debt with the proceeds from upward refinancing of four properties.
What we say:
2025-03-10, Minto reported disappointing numbers for 4Q'24 with total revenue and AFFO/ unit declining YoY. The same-property portfolio revenue of $39.4M, however, increased by 3.5% YoY, driven by a 5.5% rise in average monthly rent. SPP NOI increased by 4.1%, and the SPP NOI margin also improved by 30 bps to 63%. Net income and comprehensive income totaled $91.1M in 4Q'24. The Board of Trustees approved a 3% increase to the REIT's annual distribution in Nov'24, raising it to $0.52 per unit. The REIT also purchased $4.7M of units under its NCIB at a weighted average price of $14.03 per unit from mid-November '24 to December'24.
Investment Thesis
While Minto is a relatively new REIT on the stock market (the IPO was in July 2018), it has proven that it can effectively navigate difficult economic environments. At the end of Q3 2022, the REIT had an occupancy rate of 97.3%, compared to 97.8% at the end of Q3 2023, signalling its stability and strength. The REIT offers high-quality apartments in dense urban areas. Minto’s target markets (major Canadian cities) all posted stronger population growth than the country in total over 2022-2023. The REIT counts on the demographic trend toward major cities along with an increase in immigration to grow going forward. The REIT shouldn’t have problems with inflation as it can increase its rent prices since the demand for high-quality apartments remains strong. For Q1 2024, Minto increased its AFFO by a very strong 33% YoY.
Dividend Triangle
| 5-Yr Rev. Growth | 8.50 % |
| 5-Yr EPS Growth | 23.75 % |
| 5-Yr Div Growth | 3.75 % |
Potential Risks
Minto’s business model’s advantages could also become its weaknesses. The REIT focuses on highly dense areas. Over the past few years, this has been a sound strategy as the population has grown more rapidly in the cities in which Minto operates. As more people opt to work remotely, the need to live in a city may not be as important as it once was. Minto also uses short-term leases (1 year) as a hedge against inflation. This is great for inflation, but the REIT exposes its business model to more volatility. As the supply of new apartments increases, many investors fear apartment REITs will have to reduce their rent prices to attract and retain tenants. Keep in mind that Minto has a small cap ($500M), making the stock more vulnerable to lower trading volume and higher volatility. Finally, Minto’s apartments are heavily concentrated in Ontario (40% of the portfolio value is in Ottawa, and 33% in Toronto).
| Debt/Equity | 0.80 |
| Financial Debt to EBITDA (TTM) | 9.05 |
| Current Ratio (Quarterly) | 0.00 |
| Credit Score | 31 |
Dividend Growth Perspective
Minto’s dividend history is relatively new since the company went public in 2018. The REIT has successfully increased its dividend annually since 2019. It seems to be in a very good position, exhibiting an attractive pipeline and a decent dividend growth policy. Each quarter, FFO/unit grows by mid-single-digits. In Q1 2024, the AFFO payout ratio was 62.3%. This leaves some room for future increases in the dividend.
| Dividend ($) | 0.52 |
| Dividend Yield Fwd | 4.00 % |
| Dividend Frequency | Monthly |
| Average 5-Yr Yield | 3.15 % |
| Payout Ratio (%) | 32.00 |
| Cash Payout Ratio (%) | 29.65 |
| DGR 1-Yr | 3.00 |
| DGR 3-Yr | 3.45 |
| DGR 5-Yr | 3.75 |
| DGR Streak | |
| Chowder Score | 7.70 |
| Next DVD PMT | 05-15-25 |
Valuation
| Recent Annual Dividend Payment | $ 0.52 |
| Expected Dividend Growth Rate Years 1-10 | 3.00% |
| Expected Terminal Dividend Growth Rate | 5.00% |
| Discount Rate | 9.00% |
| Discount Rate (Horizontal) | |||
| Margin of Safety | 8.00% | 9.00% | 10.00% |
| 20% Premium | $ 18.45 | $ 13.93 | $ 11.21 |
| 10% Premium | $ 16.91 | $ 12.77 | $ 10.28 |
| Intrinsic Value | $ 15.37 | $ 11.61 | $ 9.34 |
| 10% Discount | $ 13.84 | $ 10.45 | $ 8.41 |
| 20% Discount | $ 12.30 | $ 9.29 | $ 7.48 |
Video Tutorial: How to Read the Stock Cards DDM Valuation
| Market Cap | 502.00 M |
| PE Ratio | 7.85 |
| Fwd PE | 15.60 |
| Price to Book Ratio | 0.45 |
| DDM Valuation | 11.61 |
| Average 5-Yr PE | 13.42 |
| Value Score | 73 |