Mainstreet Equity Corp. (MEQ.TO) | Investment Case

1. Company Snapshot

1.a. Company Description

Mainstreet Equity Corp.engages in the acquisition, divestiture, value-enhancement, and management of multi-family residential properties in Western Canada.The company owns a portfolio of multi-family residential properties in Vancouver and the Lower Mainland, Calgary and Southern Alberta, Edmonton, Saskatoon, and Regina.

As of September 30, 2021, it had a total portfolio of 15,071 revenue producing units consisting of townhouses, garden-style apartments, and concrete mid-rise and high-rise apartments, condo suites and 2 freestanding commercial houses.The company was founded in 1997 and is headquartered in Calgary, Canada.

Show Full description

1.b. Last Insights on MEQ

Mainstreet Equity Corp.'s recent performance was negatively impacted by a lack of significant growth drivers. Despite achieving its 13th consecutive quarter of double-digit growth in Q1 2025, the company's momentum appears to be slowing. The recent dividend declaration, while positive for shareholders, may indicate a cautious approach to capital allocation. Furthermore, the typically slower winter rental season in Q1 may have masked underlying issues, such as stagnant same-asset revenue growth and margin compression.

1.c. Company Highlights

Last Price	185.44
Change Percentage	0.22%
Open	188.61
Previous Close	185.03
Market Cap ( Millions)	1728
Volume	4088
Year High	212.58
Year Low	178.29
M A 50	186.58
M A 200	190.22

FCF Yield	4.88%
Dividend Yield	0.09%
ROE	19.03%
Debt / Equity	106.11%
Net Debt / EBIDTA	998.64%
Price To Book	1.01
Price Earnings Ratio	5.61
Price To FCF	20.47
Price To sales	6.34
EV / EBITDA	20.77

2. Transcript Summary

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3. NewsRoom

Mainstreet Equity Corp. Announces Quarterly Dividend for Period Ending September 30, 2025

Oct -09

Source:

Is Mainstreet Equity Corp. (TSE:MEQ) Expensive For A Reason? A Look At Its Intrinsic Value

Aug -08

Source:

Mainstreet Delivers 15th Straight Quarter of Double-Digit Growth Amid Economic Uncertainty

Aug -07

Source:

Mainstreet Equity Corp. Announces Quarterly Dividend for Period Ending June 30, 2025

Jul -09

Source:

Why Mainstreet Equity Corp. (TSE:MEQ) Could Be Worth Watching

Jun -17

Source:

Mainstreet Equity Corp. Announces Normal Course Issuer Bid

May -30

Source:

Mainstreet Equity Corp. (MEQ) Opens the Market

May -29

Source:

Mainstreet Equity Corp.'s (TSE:MEQ) largest shareholders are private companies with 41% ownership, individual investors own 33%

May -06

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.02%)

6. Segments

Rental

Expected Growth: 7%

Mainstreet Equity Corp.'s 7% rental growth is driven by strong demand for affordable housing, increasing rental rates, and a growing portfolio of properties. Additionally, the company's focus on value-add renovations and strategic acquisitions in high-growth markets contributes to its robust growth.

Ancillary Rental

Expected Growth: 9%

Mainstreet Equity Corp's 9% growth in Ancillary Rental is driven by increasing demand for value-added services, strategic partnerships, and expansion into new markets. Additionally, the company's focus on cost optimization, efficient operations, and investments in technology have contributed to the growth. Furthermore, the rising trend of rental living and the need for affordable housing solutions have also fueled the segment's growth.

Other Rental

Expected Growth: 6%

Mainstreet Equity Corp's 6% Other Rental growth driven by increasing demand for affordable housing, strategic acquisitions, and effective asset management. Strong operational efficiency, rent optimization, and a diversified tenant base also contribute to growth. Additionally, the company's focus on value-add initiatives and capital expenditures to enhance property values supports revenue expansion.

7. Detailed Products

Rental Properties

Mainstreet Equity Corp. offers a diverse portfolio of rental properties across Western Canada, providing affordable and comfortable living spaces for individuals and families.

Condo Management Services

Mainstreet Equity Corp. provides comprehensive condo management services, including administrative, financial, and maintenance support to condominium corporations.

Real Estate Investment Trust (REIT)

Mainstreet Equity Corp. operates as a Real Estate Investment Trust (REIT), providing investors with a stable source of income through rental properties.

Property Management Services

Mainstreet Equity Corp. offers property management services, including rent collection, maintenance, and tenant screening, to property owners and investors.

8. Mainstreet Equity Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Mainstreet Equity Corp. is medium, as there are some alternative options available for customers, but they are not very attractive.

Bargaining Power Of Customers

The bargaining power of customers for Mainstreet Equity Corp. is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Mainstreet Equity Corp. is medium, as suppliers have some negotiating power, but the company has a diversified supply chain.

Threat Of New Entrants

The threat of new entrants for Mainstreet Equity Corp. is high, as the industry has low barriers to entry and new companies can easily enter the market.

Intensity Of Rivalry

The intensity of rivalry for Mainstreet Equity Corp. is high, as the industry is highly competitive and companies are constantly competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	54.27%
Debt Cost	3.95%
Equity Weight	45.73%
Equity Cost	11.69%
WACC	7.49%
Leverage	118.69%

11. Quality Control: Mainstreet Equity Corp. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

RMR Group

A-Score: 6.2/10

Value: 7.4

Growth: 4.4

Quality: 5.8

Yield: 10.0

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

Mainstreet Equity

A-Score: 5.4/10

Value: 4.7

Growth: 7.7

Quality: 6.7

Yield: 0.0

Momentum: 4.0

Volatility: 9.7

1-Year Total Return ->

Kennedy-Wilson Holdings

A-Score: 5.1/10

Value: 5.7

Growth: 3.7

Quality: 3.5

Yield: 10.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

Newmark

A-Score: 4.9/10

Value: 5.0

Growth: 4.0

Quality: 5.4

Yield: 2.0

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

FRP Holdings

A-Score: 3.9/10

Value: 2.5

Growth: 4.0

Quality: 6.5

Yield: 0.0

Momentum: 1.5

Volatility: 8.7

1-Year Total Return ->

Marcus Millichap

A-Score: 3.9/10

Value: 5.1

Growth: 1.4

Quality: 5.0

Yield: 3.0

Momentum: 2.0

Volatility: 6.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

7.40%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.49%

Mainstreet Equity Corp. - CA5609151009

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on MEQ

1.c. Company Highlights

Lower Yield

Strong Momentum

Higher Growth

Earnings Beats

Revenues Miss

Earnings Miss

Less Volatile

Revenues Beats

Better Quality

Average Quality

Stable Momentum

Medium Volatility

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.02%)

6. Segments

Rental

Expected Growth: 7%

Ancillary Rental

Expected Growth: 9%

Other Rental

Expected Growth: 6%

7. Detailed Products

Rental Properties

Condo Management Services

Real Estate Investment Trust (REIT)

Property Management Services

8. Mainstreet Equity Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Mainstreet Equity Corp. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

185.44$

Current Price

185.44$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA