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.

Rewards

PE ratio (12x) is below the Canadian market (15.8x)

Revenue is forecast to grow 5.79% per year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Profit margins (42.6%) are lower than last year (62.9%)

Shareholders have been diluted in the past year



Snowflake Analysis

Fair value 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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.1%

MEQ

0.9%

CA Real Estate

1.5%

CA Market


1 Year Return

83.6%

MEQ

25.2%

CA Real Estate

9.8%

CA Market

Return vs Industry: MEQ exceeded the Canadian Real Estate industry which returned 25.6% over the past year.

Return vs Market: MEQ exceeded the Canadian Market which returned 10.4% over the past year.


Shareholder returns

MEQIndustryMarket
7 Day-4.1%0.9%1.5%
30 Day-4.2%2.8%2.4%
90 Day24.5%3.2%6.2%
1 Year83.6%83.6%27.3%25.2%13.4%9.8%
3 Year126.3%126.3%58.4%48.9%17.7%7.0%
5 Year124.6%124.6%91.0%51.8%36.5%16.4%

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?

11.74x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MEQ (CA$77.24) is trading above our estimate of fair value (CA$54.38)

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


Price To Earnings Ratio

PE vs Industry: MEQ is good value based on its PE Ratio (12x) compared to the Real Estate industry average (12.8x).

PE vs Market: MEQ is good value based on its PE Ratio (12x) compared to the Canadian market (15.8x).


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 good value based on its PB Ratio (0.9x) 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?

5.8%

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 (5.8% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: MEQ's revenue (5.8% 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$26.9M impacting its September 30 2019 financial results.

Growing Profit Margin: MEQ's current net profit margins (42.6%) are lower than last year (62.9%).


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 (-19.3%) 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 (7.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Mainstreet Equity's financial position?


Financial Position Analysis

Short Term Liabilities: MEQ's short term assets (CA$8.4M) do not cover its short term liabilities (CA$191.2M).

Long Term Liabilities: MEQ's short term assets (CA$8.4M) do not cover its long term liabilities (CA$1.1B).


Debt to Equity History and Analysis

Debt Level: MEQ's debt to equity ratio (134.5%) is considered high.

Reducing Debt: MEQ's debt to equity ratio has increased from 106.9% to 134.5% over the past 5 years.

Debt Coverage: MEQ's debt is not well covered by operating cash flow (3.8%).

Interest Coverage: MEQ's interest payments on its debt are not well covered by EBIT (2.1x 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

companyn/amarketbottom25%1.9%markettop25%5.4%industryaverage1.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

What is the CEO of Mainstreet Equity's salary, the management and board of directors tenure and is there insider trading?

5.0yrs

Average management tenure


CEO

Bob Dhillon 0

0yrs

Tenure

CA$1,365,207

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 ($USD1.04M) is about average for companies of similar size in the Canadian market ($USD1.00M).

Compensation vs Earnings: Bob's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.0yrs

Average Tenure

Experienced Management: MEQ's management team is seasoned and experienced (5 years average tenure).


Board Age and Tenure

13.9yrs

Average Tenure

Experienced Board: MEQ's board of directors are seasoned and experienced ( 13.9 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellCA$7,69516 Jan 20
Joseph Amantea
EntityIndividual
Role
Member of the Board of Directors
Treasurer
Shares100
Max PriceCA$76.95
SellCA$31,60023 Dec 19
Joseph Amantea
EntityIndividual
Role
Member of the Board of Directors
Treasurer
Shares400
Max PriceCA$79.00
SellCA$12,24411 Oct 19
Joseph Amantea
EntityIndividual
Role
Member of the Board of Directors
Treasurer
Shares200
Max PriceCA$61.50
SellCA$31,49009 Sep 19
Joseph Amantea
EntityIndividual
Role
Member of the Board of Directors
Treasurer
Shares500
Max PriceCA$63.00
SellCA$66,00025 Jul 19
Sheena Keslick
EntityIndividual
Role
Other Key Executive
Vice President of Operations
Shares1,100
Max PriceCA$60.00
SellCA$22,24026 Jun 19
Sheena Keslick
EntityIndividual
Role
Other Key Executive
Vice President of Operations
Shares400
Max PriceCA$55.60
SellCA$168,30821 Jun 19
Sheena Keslick
EntityIndividual
Role
Other Key Executive
Vice President of Operations
Shares3,000
Max PriceCA$56.12
BuyCA$56,25021 Jun 19
Sheena Keslick
EntityIndividual
Role
Other Key Executive
Vice President of Operations
Shares1,000
Max PriceCA$56.25
SellCA$84,76614 Jun 19
Sheena Keslick
EntityIndividual
Role
Other Key Executive
Vice President of Operations
Shares1,500
Max PriceCA$56.69
BuyCA$56,82614 Jun 19
Sheena Keslick
EntityIndividual
Role
Other Key Executive
Vice President of Operations
Shares1,000
Max PriceCA$56.93

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.6%.


Management Team

  • Johnny C. Lam

    Chief Operating Officer

    • Tenure: 11.8yrs
    • Compensation: CA$855.95k
  • Bob Dhillon

    Founder

    • Compensation: CA$1.37m
  • Joe Amantea

    Treasurer

    • Tenure: 19.8yrs
    • Compensation: CA$35.00k
  • Sheena Keslick

    Vice President of Operations

    • Tenure: 7.3yrs
    • Compensation: CA$176.99k
  • Na Cui

    Chief Financial Officer

    • Tenure: 2.8yrs
    • Compensation: CA$170.10k
  • Luckresha Baker

    Human Resources Manager

    • Tenure: 2yrs

Board Members

  • Ron Anderson (66yo)

    Independent Director

    • Tenure: 8.8yrs
    • Compensation: CA$35.00k
  • Bob Dhillon

    Founder

    • Compensation: CA$1.37m
  • Joe Amantea

    Treasurer

    • Tenure: 19.8yrs
    • Compensation: CA$35.00k
  • Rich Grimaldi

    Independent Director

    • Tenure: 15yrs
    • Compensation: CA$35.00k
  • John Irwin

    Independent Director

    • Tenure: 12.8yrs
    • Compensation: CA$35.00k
  • K.V. Dhillon

    Director

    • Tenure: 12.8yrs
    • Compensation: CA$35.00k

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$705.881m
  • 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 Analysis2020/01/19 23:39
End of Day Share Price2020/01/17 00:00
Earnings2019/09/30
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.