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  5. MEQ: Hi Team, Can I get your analysis on this company and if you think it will continue to be a long term compounder? [Mainstreet Equity Corp.]
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Q: Hi Team,

Can I get your analysis on this company and if you think it will continue to be a long term compounder?

Thanks
Asked by Keith on June 20, 2025
5i Research Answer:

MEQ has been a solid performer over the years, with a 21% five-year CAGR, and an 18% 10-year annualized return. It has a strong track record of earnings expansion and beating earnings estimates. It is fairly small ($1.8B market cap), and it is also fairly illiquid. It does have certain risks such as a high leverage profile, and it operates in a cyclical rental market, but it generates steady free cash flows, has tailwinds from demand for the urban rental market, and it has delivered strong growth with little to no share dilution. We think it has many qualities of a long-term compounder, but we would be mindful of its small size, high debt profile, and exposure to a cyclical market.

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