1 Undervalued TSX Stock Down 34% to Buy as Housing Costs Surge

Don’t let the share price get you down. This undervalued TSX stock could certainly be due for a comeback.

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House prices in Canada are sky-high! Many investors are looking at real estate to make some money. One interesting option is Boardwalk Real Estate Investment Trust (TSX: BEI.UN). This residential real estate investment trust’s (REIT) stock price has dropped quite a bit from its highest point in the last year, now down by 34%. This dip might mean it’s a good value buy right now. It could be a chance to get in at a lower price.

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About Boardwalk

Boardwalk REIT focuses on apartment buildings and other multi-family homes. Most of its properties are in Alberta, Saskatchewan, and Ontario. The trust owns over 33,000 homes, renting them out to lots of different people. Even though the stock price has gone down recently, the fundamentals of the TSX stock still look pretty good.

The reason Boardwalk’s stock has gone down is likely a mix of things. The whole stock market has been a bit shaky, and there have been some economic challenges in the areas where it owns property. However, the demand for rental homes in Canada is still strong. More people are moving to cities, the population is growing, and buying a house is just too expensive for many. These trends are good news for residential REITs like Boardwalk in the long run.

Considerations

In Boardwalk REIT’s latest financial report, it announced a monthly dividend payout of $0.0834 per unit, adding up to $1 per year. The dividend is now yielding 2.6%. This shows that the trust is committed to giving money back to the people who own its units. Also, the percentage of apartments that are rented out (occupancy rates) and the money it’s making from rent have been pretty stable. This suggests that the company is operating well with consistent income.

Investors who are thinking about Boardwalk REIT should also look at what the trust is planning to do. It’s been upgrading its properties and trying to make its overall collection of properties even better. These efforts are aimed at making tenants happier and improving the TSX stock’s financial performance. Plus, the trust is focused on areas where the population is expected to grow, which puts it in a good position for the future. It’s thinking ahead.

Of course, like with any investment, there are always some risks involved. The value of Boardwalk REIT can go up or down. However, the current lower price of its units might be a good opportunity for investors who want to get into the Canadian residential real estate market. As always, it’s really important to do your own research and think about your own investment goals before making any decisions. It’s all about finding what fits your needs.

Bottom line

Boardwalk REIT holds a steady demand for rentals. Even if the economy has some bumps, people still need homes. This can make residential REITs a bit more stable than other types of investments. Keeping an eye on earnings reports and announcements is a good idea, as well as making sure the TSX stock can hold up its dividend. Boardwalk’s long-term vision for growth and sustainability is also worth considering. A well-managed REIT can provide both income and potential capital appreciation over time. Investing in REITs is different from owning physical property directly. REITs offer liquidity and diversification. However, they also come with their own set of risks and rewards. So make sure to consider it all before diving in.

Fool contributor Amy Legate-Wolfe 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.

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