Bridgemarq Real Estate Services Inc. (TSX:BRE) has a dividend yield of more than 7.5% that is supported by the Company’s stable cash flow
Capital Ideas Media | June 18, 2021 | SmallCapPower: Canada’s ‘red hot’ residential real estate market is being fueled by ultra-low interest rates, tight supply, and pandemic-related restrictions that have not only boosted household savings but also elevated the lifestyle value of a home as a place where we now do the majority of our work and play.
(Originally published on Capital Ideas Media on May 4, 2021)
Investors who want to participate in this housing-demand boom, but don’t want to get caught up in a bidding war, might want to consider shares of Bridgemarq Real Estate Services Inc. (TSX:BRE).
Bridgemarq employs a network of about 19,000 real estate brokers in Canada (about 60% of which service the high-volume Ontario market) through its established brands such as Royal LePage, Ontario-based Johnston & Daniel, and Quebec-based Via Capitale, handling about 16% of all residential real estate transactions in Canada in 2020.
Formerly known as Brookfield Real Estate Services Inc, Bridgemarq is an affiliate of Brookfield Business Partners.
A drop in real estate transactions during the onset of COVID-19 weighed on the Company’s financial results during 2020, but growing demand for housing began mid-year and continued throughout the second half, while showing no signs of slowing during the first quarter of 2021.
The primary reason for owning shares of Bridgemarq is its dividend. The stock is currently yielding 7.6% and its payout rate appears to be sustainable due to the stability of the Company’s cash flow.
Bridgemarq has long-term franchise agreements with terms ranging from 10 to 20 years with a typical renewal term of 10 years. About 73% of franchise fees are fixed, providing predictable recurring revenue.
Historically, Bridgemarq’s renewal success in franchise agreements is more than 95%.
Thus, along with providing a decent payout Bridgemarq shareholders should also see some capital appreciation in 2021.
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