Real Estate & E-Commerce Split Corp. is a balanced mutual fund launched by Middlefield Limited. The fund is managed by Middlefield Capital Corporation. Real Estate & E-Commerce Split Corp. Real Estate & E-Commerce Split Corp. was formed on October 7, 2020 and is domiciled in Canada.

Canada

Real Estate Split Corp.

Financial Services

The company pays dividends most of the time. It has paid dividends in almost every one of the past ten years. Dividend per share (DPS) has grown yearly, and there is an evident trend. 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. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 25ppts over six months and grown 4ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.2 in the past several years. This ratio implies a fragile shareholder value creation. 

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.

RS.TO has poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is usually quite stable and remains mildly favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, excessive margin volatility, poor working capital management, and poor cash flow generation. We note resilient historical revenue growth, robust profitability, adequate interest coverage, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, RS.TO is as volatile as an index. In other words, the stock will move with 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 limited. 

In normal market circumstances, RS.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. Specifically, the stock is fairly valued on P/E, overvalued on EV/EBITD. 

Real Estate Split Corp.

CA$ 9.03

4

Real Estate Split Corp.

CA$ 9.03

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CA$ 9.03

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