Capital Direct I Income Trust
Record Receivables and Earnings with Reduced Risk Profile
Published: 5/8/2025
Author: FRC Analysts
Sector: Mortgage | Industry: Mortgage
Ticker Symbols:
Rating and Key Data
| Metrics | Value |
|---|---|
| Current Price | CAD $10 |
| Fair Value | CAD $ |
| Risk | 2 |
| 52 Week Range | CAD $ |
| Shares O/S (M) | N/A |
| Market Cap. (M) | CAD $ |
| Current Yield (%) | N/A |
| P/E (forward) | N/A |
| P/B | N/A |
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Report Highlights
- In 2024, mortgage receivables increased 21% YoY to $476M, exceeding our forecast by 10%. In Q1-2025, receivables increased 10% YTD to $521M - the highest in Capital Direct I Income Trust’s (CDIT) history.
- CDIT is one of the larger Mortgage Investment Entities (MIEs) in Canada. The MIE remains focused on first/second mortgages for single family residential units in B.C. and ON.
- In 2024, the fund achieved record revenue and net income. Net income was up 27% to $34M, beating our estimate by 14%, driven by higher lending rates, and mortgage receivables. The yield on class F units increased 1.1 pp to 9.8% in 2024 (our forecast was 9.4%), and to 10.1% in Q1-2025.
- Since May 2024, the BoC has cut rates seven times (225 bp), with the potential for one or two more cuts this year, driven by high unemployment, escalating geopolitical/trade risks, and concerns over potential weakness in GDP growth.
- We find high-yielding funds, like CDIT, increasingly attractive in the current declining rate environment. This is because MIC lending rates are less elastic, meaning their yields tend to dec