The average target price of AI.TO is 13 and suggests 15% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 13.0. This translates into 17% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 12.8. This suggests 15% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Atrium Mortgage Investment Corporation, a non-bank lender, provides financing solutions to the real estate communities in Ontario, Alberta, and British Columbia. It offers various types of mortgage loans for residential, multi-residential, and commercial real properties, which includes first and second mortgages; infill construction and financing; land and land assembly financing for stacked and traditional townhomes, single detached homes, and low-rise and midrise condominiums; and bridge and term financing. The company was incorporated in 2001 and is headquartered in Toronto, Canada.

Canada

Atrium Mortgage Investment Corporation

Financial Services

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends monthly, which may appeal to investors valuing a regular income stream. 

AI.TO reported revenue of CAD 63mn in the last 12 months, down 1% from FY23. The institution earned CAD 74 mn of interest before provisioning and taxes (IBPT) in the trailing 12 months (TTM), a decline of 13% from FY23 The dynamics of more stable income, as measure by recurring income before provisioning and taxes (RIBPT), were rather similar. EPS fell 1% from FY23 to CAD 1.17. Market expects EPS to reach CAD 1.03 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 4ppts and its growth decelerated by 2ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

Atrium Mortgage Investment Corporation reported a return on equity (RoE) of 9.6% in the last 12 months, down from 10.8% in FY23. The market consensus projects a RoE of 9.6% in FY24.

In the last 12 months, the cost-to-income ratio (C/I) grew to 2.1%, The consensus estimate for FY24 for CI is 1.8%.

Another important profitability metric, return on assets (RoA), amounted to 5.5% in the last 12 months, a decrease from 5.9% in FY23. The market analysts predict that RoA will be 3.9% in FY24.

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

AI.TO has average trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity is usually very stable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The solvency (credit quality) of AI.TO is very low. The credit profile rests on (a) a very strong capital position, (b) substantial asset quality, (с) a moderate corporate governance framework, (d) below average earnings power and cost efficiency, and (e) its very poor liquidity profile. We draw special attention to the fairly weak liquidity position, which could instantly become a critical factor in the case of an unexpected bank run.

In highly turbulent market conditions, AI.TO is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, AI.TO is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. In particular, the stock is reasonably priced on P/E, of fair value on P/IBPT, trading at neutral levels on P/RIBPT. 
	Editor's note: P/CR is Price to Core Revenue (CR), similar to P/S for corporates. CR = Net interest income + Net fee & commission income. P/IBPT is Price to Income Before Provisioning and Taxes (IBPT), similar to EV/EBITDA for corporates. IBPT = Core revenue -- Operating expenses + Non-recurring income. P/RIBPT is Price to Recurring Income Before Provisioning and Taxes (RIBPT), similar to P/FCF for corporates. RIBPT = Core revenue -- Operating expenses. 

Atrium Mortgage Investment Corporation

CA$ 11.11

3

Atrium Mortgage Investment Corporation

CA$ 11.11

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CA$ 11.11

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