# Tricon Residential



## Numbersman61 (Jan 26, 2015)

I note they are doing a stock offering in the US and the shares will soon trade on NYSE. Any thoughts on this company? Excellent exposure to US residential market.


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## Jimmy (May 19, 2017)

I think they are pretty good and one of the best non REIT real estate stocks. Up 51% 1yr return. I think you could expect ~15% cagr going forward. A little pricey now. Colliers is another good company. They both are Motley Fool picks.


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## Numbersman61 (Jan 26, 2015)

I see Starlight has a new issue of closed end units. I decided to buy Tricon due to broader exposure in the US.


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## doctrine (Sep 30, 2011)

The problem with publicly traded real estate companies is the dilution. You think you own certain real estate assets with a company, and the second they start to realize value and the stock takes off, the CEO and executives will dilute you down 10-20% to start the next project, increase the portfolio, and the executive compensation. So although it is up 50% in a year, it's actually a lower return since 2015 when it was nearly $12. But it's a bigger company and all the insiders are being paid more, or will be soon.

One of the few exceptions is MEQ, which had to ensure years of lackluster west coast real estate (Alberta and interior BC), but generally do not dilute and actually buy back shares. It's up over 200% since 2015, actually reflecting real estate inflation that you see everywhere, and had a much better chart.


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## londoncalling (Sep 17, 2011)

doctrine said:


> The problem with publicly traded real estate companies is the dilution. You think you own certain real estate assets with a company, and the second they start to realize value and the stock takes off, the CEO and executives will dilute you down 10-20% to start the next project, increase the portfolio, and the executive compensation. So although it is up 50% in a year, it's actually a lower return since 2015 when it was nearly $12. But it's a bigger company and all the insiders are being paid more, or will be soon.
> 
> One of the few exceptions is MEQ, which had to ensure years of lackluster west coast real estate (Alberta and interior BC), but generally do not dilute and actually buy back shares. It's up over 200% since 2015, actually reflecting real estate inflation that you see everywhere, and had a much better chart.


The other thing about MEQ is that it doesn't pay a dividend. From my observations this atypical of realty companies. Dilution for expansion on its own is a good thing if executed properly. Dilution through insider compensation is a problem and requires one to take a closer look at the companies practices not just its performance.

Disclosure: I have looked at MEQ but my IPS requires the company to pay a dividend so have never purchased.


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