1) Colliers International Group (CIGI)
Toronto-based Colliers International Group is probably a familiar name to many Canadians as their brand appears on many real estate related websites. I put this stock at the top of my list of the best Canadian real estate stocks for 2022 simply because it is more diverse than the other stocks on the list.
The company operates in 68 countries and serves real estate owners and developers around the world – Colliers International makes money whenever people want to buy and sell property.
While the company has seen explosive growth over the past five years, with earnings growing steadily by double digits over the past five years, and with valuations currently depressed due to the sell-off in growth stocks, some experts believe this could be a good entry point.
2) First Service Corporation (FSV)
FSV is primarily a U.S. company, (90% of its revenue comes from the U.S.), and the company’s earnings are split evenly between its two verticals, residential and brands.
Like Colliers Real Estate, FirstService operates on the periphery of the real estate market. They do not own real estate directly like a REIT. FirstService has a steady stream of dividend growth. Most of their earnings are moving in a positive direction.
3) MCAN Mortgage Corporation (MKP)
The third largest real estate stock in Canada is MCAN Mortgage Corp. As a private mortgage company, MCAN takes money from investors and lends it to buyers of residential and commercial properties. This is essentially a pure leverage play in the Canadian housing market – far more than Canada’s diversified banks.
Since MCAN passes almost 100% of its earnings to shareholders, it is a pure income play with very little overall share growth for the foreseeable future.
4) Timbercreek Financial (TF)
Timbercreek Financial is somewhat similar to MCAN Mortgage in that they are both publicly traded niche lenders with market caps well under $1 billion. tF is somewhat unique in that its core focus is on multi-residential properties, retail and undeveloped land. This is another purely Canadian play.
While the 8.5% dividend yield may have caught your eye, keep in mind that their payout ratio of over 140% is not exactly the sound of a “buy”. They are a small multi-unit correction and have had to cut their dividend significantly – which will be drastic for the shareholders of the small lender given the low growth profile.