Key Highlights

  • In 2019, Atrium Mortgage Investment Corporation (“Atrium”, “company”) reported a 14% YoY increase in both revenue and net income.
  • Subsequent to the year-end, the company announced a special dividend of $0.06 per share, bringing the total dividend in 2019 to $0.96 per share, exactly in line with our estimate.
  • Our forecast for total dividends in 2020 is $0.99 per share (previously $1.02). We are introducing our 2021 forecast of $1.02 per share.
  • Reported nil realized losses in 2019 versus $7.10 million for 2018 (1.1% of the portfolio).
  • In Q4-2019, the company had record originations and repayments. Approximately $120 million of mortgages were advanced (up 16% YoY), and $128 million were repaid (up 112% YoY). As a result, net mortgage receivables declined 1.3% QoQ to $727 million (our estimate was $724 million).
  • Although originations are expected to increase, due to high expected repayments, management estimates the 2020 year-end portfolio size will remain flat on a YoY basis.
  • We are maintaining our 2020 year-end portfolio size estimate at $750 million (debt to capital of 36%), and introducing our 2021 year-end estimate of $800 million (debt to capital of 40%).
  • With the Toronto real estate market looking strong, and the Vancouver residential market showing signs of stabilization, we expect originations for MICs to improve YoY in 2020. This is likely to be partially offset by a lower interest rate environment, primarily due to the overall weakness in the economy.

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