EPS was ($0.33) and sales of $85.79M beat estimates of $85.2M. These results reflected modest growth in key metrics, with sales rising 1.2% and its net operating income rose 5.6%. Although, its adjusted FFO declined by 11.4%, reflecting ongoing property improvements and retention investments. It is possible that Morguard's substantial ownership stake is causing some investor concern around liquidity, thus reducing its valuation, but it is also smaller than other residential REITs in the market, which could impact its valuation.
Its low payout ratio is somewhat lower than other REITs like CAR.UN and IIP.UN, but we would not consider the difference to be too large. In recent years, MRG.UN has been building up a cash pile with its excess cash flows, bringing cash from $18M in FY2023 to $103M currently. This cash could help fund future property acquisitions.