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1. Company Snapshot

1.a. Company Description

Melcor Developments Ltd.operates as a real estate development company in the United States and Canada.The company operates through Community Development, Property Development, REIT, Investment Property, and Recreational Property segments.


It develops, manages, and owns mixed-use residential communities, business and industrial parks, office buildings, retail centers, and golf courses.The company purchases and develops land to be sold as residential, industrial, and commercial lots; develops, constructs, and leases retail, office, and industrial properties; and owns and leases commercial, retail, and residential properties, as well as parking lots and land.It also owns and manages three 18-hole golf courses.


Melcor Developments Ltd.was founded in 1923 and is headquartered in Edmonton, Canada.

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1.b. Last Insights on MRD

Melcor Developments' recent performance was driven by several positive factors. The company's second-quarter results, announced on August 14, 2025, showcased its resilience in the Alberta real estate market. Additionally, the declaration of a quarterly dividend of $0.13 per share, increasing from the previous year's payment, underscores the company's commitment to rewarding shareholders. A normal course issuer bid, launched in June 2025, allows Melcor to purchase up to a certain number of shares for cancellation, potentially boosting shareholder value. These developments highlight Melcor's strategic focus on growth and shareholder returns.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Discovering Canada's Hidden Stock Opportunities November 2025

Nov -28

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Undiscovered Gems In Canada November 2025

Nov -19

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Undiscovered Canadian Gems with Strong Fundamentals for November 2025

Nov -17

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Exploring Canada's Undiscovered Gems This November 2025

Nov -12

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Melcor Developments announces third quarter results, declares quarterly dividend of $0.13 per share

Nov -06

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Melcor Developments (TSE:MRD) Will Pay A Larger Dividend Than Last Year At CA$0.13

Aug -18

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Melcor Developments announces second quarter results, declares quarterly dividend of $0.13 per share

Aug -14

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Melcor Developments' (TSE:MRD) investors will be pleased with their solid 142% return over the last five years

Aug -11

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.77%)

6. Segments

Land

Expected Growth: 1.5%

Melcor Developments Ltd.'s 1.5% land growth is driven by increasing demand for residential and commercial properties, fueled by a strong economy, low unemployment, and rising population growth. Additionally, strategic land acquisitions, partnerships, and development of master-planned communities contribute to the company's growth.

Real Estate Investment Trust

Expected Growth: 2.5%

Melcor Developments Ltd.'s 2.5% growth in Real Estate Investment Trust (REIT) is driven by increasing demand for commercial and residential properties, strategic acquisitions, and a strong balance sheet. Additionally, the company's diversified portfolio across Western Canada and its focus on value-add opportunities contribute to its steady growth.

Properties

Expected Growth: 2.2%

Melcor Developments Ltd.'s 2.2% growth is driven by increasing demand for residential and commercial properties in Western Canada, fueled by a strong economy, low unemployment, and government investments in infrastructure. Additionally, the company's diversified portfolio, strategic land acquisitions, and focus on mixed-use developments contribute to its growth momentum.

Intersegment Elimination

Expected Growth: 0.5%

Melcor Developments Ltd.'s 0.5 intersegment elimination growth is driven by increasing land development projects, rising commercial and residential property values, and strategic partnerships. Additionally, the company's focus on mixed-use developments and expansion into new markets contribute to this growth. Effective cost management and optimized operational efficiencies also support this growth.

Golf

Expected Growth: 1.8%

Golf course development from Melcor Developments Ltd. growth of 1.8% driven by increasing demand for luxury recreational spaces, proximity to urban centers, and strategic land acquisitions. Additionally, government initiatives to promote eco-tourism and outdoor recreation contribute to the segment's growth.

7. Detailed Products

Commercial Properties

Melcor Developments Ltd. offers a range of commercial properties for lease or sale, including office spaces, retail stores, and industrial facilities.

Residential Properties

The company develops and sells residential properties, including single-family homes, townhouses, and condominiums.

Land Development

Melcor Developments Ltd. acquires and develops raw land into residential and commercial properties.

Property Management

The company offers property management services, including leasing, maintenance, and rent collection.

Investment Properties

Melcor Developments Ltd. offers investment opportunities in commercial and residential properties.

8. Melcor Developments Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Melcor Developments Ltd. operates in a competitive industry, but its diversified portfolio and strong brand recognition mitigate the threat of substitutes.

Bargaining Power Of Customers

Melcor Developments Ltd.'s customers have limited bargaining power due to the company's strong market position and diversified product offerings.

Bargaining Power Of Suppliers

Melcor Developments Ltd. relies on a diverse range of suppliers, which reduces the bargaining power of individual suppliers, but the company still needs to negotiate with them to ensure timely and cost-effective delivery of materials.

Threat Of New Entrants

The threat of new entrants is low due to the significant barriers to entry in the real estate development industry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The real estate development industry is highly competitive, with many established players competing for market share, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 37.18%
Debt Cost 7.09%
Equity Weight 62.82%
Equity Cost 10.90%
WACC 9.48%
Leverage 59.17%

11. Quality Control: Melcor Developments Ltd. passed 4 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

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Melcor

A-Score: 6.6/10

Value: 6.5

Growth: 4.9

Quality: 4.9

Yield: 7.0

Momentum: 6.5

Volatility: 10.0

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Quality: 4.9

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A-Score: 5.4/10

Value: 7.3

Growth: 7.0

Quality: 5.9

Yield: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.43$

Current Price

15.43$

Potential

-0.00%

Expected Cash-Flows