TSX:MEQ

Stock Analysis Report

Mainstreet Equity

Executive Summary

Mainstreet Equity Corp., a real estate corporation, engages in the acquisition, divestiture, financing, value-enhancement, and management of multi-family residential properties primarily in Western Canada.


Snowflake Analysis

Overvalued with concerning outlook.

Share Price & News

How has Mainstreet Equity's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MEQ's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.4%

MEQ

-2.5%

CA Real Estate

-3.8%

CA Market


1 Year Return

98.9%

MEQ

20.5%

CA Real Estate

0.5%

CA Market

Return vs Industry: MEQ exceeded the Canadian Real Estate industry which returned 20.5% over the past year.

Return vs Market: MEQ exceeded the Canadian Market which returned 0.5% over the past year.


Shareholder returns

MEQIndustryMarket
7 Day0.4%-2.5%-3.8%
30 Day15.8%2.6%-2.0%
90 Day27.6%6.8%-0.3%
1 Year98.9%98.9%22.5%20.5%3.7%0.5%
3 Year150.3%150.3%47.7%39.5%13.6%3.4%
5 Year145.2%145.2%85.9%47.3%30.2%11.2%

Price Volatility Vs. Market

How volatile is Mainstreet Equity's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Mainstreet Equity undervalued compared to its fair value and its price relative to the market?

14.47x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MEQ (CA$90.98) is trading above our estimate of fair value (CA$47.05)

Significantly Below Fair Value: MEQ is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MEQ is poor value based on its PE Ratio (14.5x) compared to the Real Estate industry average (13.4x).

PE vs Market: MEQ is good value based on its PE Ratio (14.5x) compared to the Canadian market (15.4x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MEQ's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MEQ is overvalued based on its PB Ratio (1.1x) compared to the CA Real Estate industry average (0.9x).


Next Steps

Future Growth

How is Mainstreet Equity forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

7.6%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if MEQ's forecast earnings growth is above the savings rate (1.4%).

Earnings vs Market: Insufficient data to determine if MEQ's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MEQ's revenue (7.6% per year) is forecast to grow faster than the Canadian market (4.7% per year).

High Growth Revenue: MEQ's revenue (7.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MEQ's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Mainstreet Equity performed over the past 5 years?

12.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MEQ has a large one-off gain of CA$19.9M impacting its December 31 2019 financial results.

Growing Profit Margin: MEQ's current net profit margins (41.2%) are lower than last year (62%).


Past Earnings Growth Analysis

Earnings Trend: MEQ's earnings have grown by 12% per year over the past 5 years.

Accelerating Growth: MEQ's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MEQ had negative earnings growth (-22.2%) over the past year, making it difficult to compare to the Real Estate industry average (-22.9%).


Return on Equity

High ROE: MEQ's Return on Equity (7.2%) is considered low.


Next Steps

Financial Health

How is Mainstreet Equity's financial position?


Financial Position Analysis

Short Term Liabilities: MEQ's short term assets (CA$12.2M) do not cover its short term liabilities (CA$189.5M).

Long Term Liabilities: MEQ's short term assets (CA$12.2M) do not cover its long term liabilities (CA$1.1B).


Debt to Equity History and Analysis

Debt Level: MEQ's debt to equity ratio (134.7%) is considered high.

Reducing Debt: MEQ's debt to equity ratio has increased from 107.2% to 134.7% over the past 5 years.

Debt Coverage: MEQ's debt is not well covered by operating cash flow (3.4%).

Interest Coverage: MEQ's interest payments on its debt are not well covered by EBIT (2.2x coverage).


Balance Sheet

Inventory Level: MEQ has a high level of physical assets or inventory.

Debt Coverage by Assets: MEQ's debt is not covered by short term assets (assets are 0x debt).


Next Steps

Dividend

What is Mainstreet Equity's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate MEQ's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate MEQ's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if MEQ's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MEQ's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of MEQ's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average management tenure


CEO

Bob Dhillon 0

CA$2,393,225

Compensation

Mr. Navjeet S. Dhillon, also known as Bob, is the Founder and Owner of Mainstreet Equity Corp. and serves as its Chief Executive Officer, President and has been Director of Mainstreet Equity Corp. since Ju ...


CEO Compensation Analysis

Compensation vs Market: Bob's total compensation ($USD1.80M) is about average for companies of similar size in the Canadian market ($USD1.60M).

Compensation vs Earnings: Bob's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Navjeet Dhillon
Founder0yrsCA$2.39m46.01% CA$401.5m
Trina Cui
Chief Financial Officer2.9yrsCA$196.54kno data
Johnny C. Lam
Chief Operating Officer11.9yrsCA$873.11k0.17% CA$1.5m
Joseph Amantea
Treasurer19.9yrsCA$35.00k0.17% CA$1.5m
Sheena Keslick
Vice President of Operations7.3yrsCA$248.16k0.011% CA$93.0k
Luckresha Baker
Human Resources Manager2.1yrsno datano data

5.1yrs

Average Tenure

Experienced Management: MEQ's management team is seasoned and experienced (5.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Navjeet Dhillon
Founder0yrsCA$2.39m46.01% CA$401.5m
Joseph Amantea
Treasurer19.9yrsCA$35.00k0.17% CA$1.5m
Ron Anderson
Independent Director8.8yrsCA$40.00k0.037% CA$323.2k
Richard Grimaldi
Independent Director15.1yrsCA$35.00k0.43% CA$3.8m
John Irwin
Independent Director12.8yrsCA$40.00k0.021% CA$186.0k
Karanveer Dhillon
Director12.8yrsCA$35.00k2.01% CA$17.5m

14.0yrs

Average Tenure

Experienced Board: MEQ's board of directors are seasoned and experienced ( 14 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MEQ insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.2%.


Top Shareholders

Company Information

Mainstreet Equity Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mainstreet Equity Corp.
  • Ticker: MEQ
  • Exchange: TSX
  • Founded: 1997
  • Industry: Real Estate Operating Companies
  • Sector: Real Estate
  • Market Cap: CA$872.501m
  • Shares outstanding: 9.38m
  • Website: https://www.mainst.biz

Number of Employees


Location

  • Mainstreet Equity Corp.
  • 305 – 10 Avenue SE
  • Calgary
  • Alberta
  • T2G 0W2
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MEQTSX (The Toronto Stock Exchange)YesCommon Voting SharesCACADDec 1998
MEQY.FOTCPK (Pink Sheets LLC)YesCommon Voting SharesUSUSDDec 1998

Biography

Mainstreet Equity Corp., a real estate corporation, engages in the acquisition, divestiture, financing, value-enhancement, and management of multi-family residential properties primarily in Western Canada. The company owns a portfolio of mid-market rental apartment buildings in Vancouver lower mainland, Calgary, Edmonton, Regina, and Saskatoon. As of September 30, 2019, it had a total portfolio of 12,898 residential units and 3 freestanding commercial houses, including townhouses, garden-style apartments, and midrise and high-rise apartments. The company was founded in 1997 and is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 00:35
End of Day Share Price2020/02/25 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.