This New Dividend Aristocrat Looks Dirt Cheap in February 2023

The Minto Apartment Real Estate Investment Trust (TSX:MI.UN) is a new Dividend Aristocrat that is undervalued in early February.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Minto Apartment REIT (TSX:MI.UN) is an Ottawa-based real estate investment trust (REIT) that owns and operates a portfolio of income-producing multi-residential rental properties across Canada. Today, I want to discuss why I’m looking to snag this undervalued Dividend Aristocrat in February. Let’s jump in.

How has this Dividend Aristocrat performed over the past year?

Shares of this REIT have dropped 23% year over year as of close on February 7. However, the stock has jumped 19% so far in 2023. Fool readers can play with the interactive price chart below to get a better handle on its recent performance.

Created with Highcharts 11.4.3Minto Apartment Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Should investors be encouraged by Minto’s recent earnings?

Investors can expect to see Minto REIT’s fourth-quarter (Q4) and full-year fiscal 2022 earnings in the first half of March. In the third quarter of fiscal 2022, Minto REIT delivered average monthly rent growth of 3.8% to $1,714. Meanwhile, it reported average occupancy of unfurnished suites of 96.2%, which was up from 92.9% in the third quarter of fiscal 2021. End of period occupancy stood at a strong 97.4%.

Minto delivered total revenue of $37.8 million — up 21% from the previous year. Meanwhile, total revenue for the same-property portfolio increased 9.8% to $34.3 million. Net operating income (NOI) climbed 24% year over year to $24.2 million, while NOI for the same-property portfolio jumped 13% to $22.0 million. Moreover, adjusted funds from operations (AFFO) increased 28% year over year to $14.0 million and AFFO per unit jumped 15% to $0.2121.

In the first nine months of fiscal 2022, this REIT achieved revenue from investment properties of $105 million — up 16% from the previous year of $91.1 million. The same-property portfolio revenue posted 8.5% growth to $98.8 million.

On the unit front, this REIT repositioned 75 suites across its portfolio that generated an annualized return of 9.4%. In the third quarter, Minto acquired 182,227 units under its normal course issuer bid at an average price of $15.15 per unit.

Why I’m looking to snatch up this Dividend Aristocrat today

A Canadian Dividend Aristocrat needs to have a market cap of at least $300 million. Moreover, the company needs to have achieved annual increases to its dividend for at least five consecutive years. Fortunately, Minto REIT has recently ticked off the box for the latter. This makes it a very solid target for income-oriented investors right now.

In Q3 2022, Minto REIT approved a monthly dividend increase of $0.015 per share. That represents a 3.2% increase to its annual distribution from $0.4750 per unit to $0.49 per unit. This now brings the monthly distribution rate to $0.041 per unit, which represents a 2.9% dividend yield. Moreover, Minto REIT has now achieved five consecutive years of annual dividend growth. That means it has officially entered the Canadian Dividend Aristocrat club.

Shares of this dividend aristocrat currently possesses a price-to-earnings ratio of 2.3. That puts this REIT in very attractive value territory at the time of this writing.

Should you invest $1,000 in Minto Apartment Real Estate Investment Trust right now?

Before you buy stock in Minto Apartment Real Estate Investment Trust, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Minto Apartment Real Estate Investment Trust wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Canadian Red maple leaves seamless wallpaper pattern
Dividend Stocks

5 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These Canadian stocks have paid dividends for decades, making them reliable investments to generate regular passive income.

Read more »

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »