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Canadian Apartment Properties Real Estate Investment Trust (CAR.UN $45.17)
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Minto Apartment Real Estate Investment Trust (MI.UN $14.55)
Q: What are the strengths and weaknesses of Minto ? In your last comments on the reit you did not have a good opinion on it. Do you still feel the same? Would you considers buying MU.UN now?
5i Research Answer:
It is a $939M apartment REIT, with a yield of 3.5%. Analyst estimates have mostly been declining, and growth has slowed recently. Its margins are OK, free cash flows have improved, and it has been buying back shares recently. It has actively refinanced high-cost variable rate debt with longer-term CMHC insured loans, reducing interest expenses, and its balance sheet has slightly strengthened. It trades at an OK valuation of 16X forward earnings. Momentum looks to be improving, but we would prefer a stronger name like CAR.UN.