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Boardwalk REIT: When It's Raining Gold, Reach For A Bucket

Bank On Insight profile picture
Bank On Insight


  • Boardwalk is a very conservatively managed REIT with strong shareholder alignment.
  • Its share price already lagged Canadian residential REIT peers significantly due to its Alberta weighting.
  • Its share price has been hit by a freight train after the oil price crash and COVID-19 shock in 2020.
  • Boardwalk is trading cheaper than 2009 levels and is well positioned for a recovery.
  • Over 100% upside in the coming years.

Note: Boardwalk trades OTC under ticker OTCPK:BOWFF. It trades with significantly greater liquidity in Canada on the TSE ticker BEI.UN. Since Boardwalk is a Canadian company reporting in CAD, all numbers discussed are in CAD.

It appears that open-season for cash-carrying investors has arrived. Canadian equity markets are presented with a confluence of events, that they now trade at levels that are depressed to Great Recession levels by many forward earnings metrics. With that said, there are things we can take away from the Great Recession. Deploying capital too early cost many dearly. There are also some sectors that have a very hard time failing in a recession. Residential REITs are a fantastic defensive asset class. If we can find one that got 'hit by a bus' through a downturn that's well managed, that draws my attention rather quickly. Boardwalk presents a better buying opportunity than it did in 2009... that's rather exciting!

Boardwalk's price per door is ridiculously cheap

Source: Boardwalk Q4 2019 earnings presentation

Without any sort of advanced accounting, and simply sorting through Boardwalk's 2019 AIF, we can glean a lot of useful information in valuing this REIT. Boardwalk is sitting on $2.74bn of CMHC insured mortgages, equating to ~$59 of mortgage debt per share, or $83.6k per unit distributed across Boardwalk's 32.76k rental units as of Q4 2019. From there, we can add in market cap to determine what Mr. Market is valuing Boardwalk's apartment units at. At ~$25 per unit, as of May 5, 2020 (a $1.15bn market cap), Boardwalk's being ascribed a value per door of $119k. That is very, very cheap (an implied cap-rate of ~7.75%).

ChartData by YCharts

Boardwalk REIT has gotten comparatively hammered relative its peers. Note the group moved almost entire in tandem prior to the oil price crash.


This article was written by

Bank On Insight profile picture
I manage a conservative portfolio of blue-chip equities. I target dividend-paying blue chips on sale. The majority of my articles will focus on what I know best (and what is under-covered on Seeking Alpha), Canadian mid and large caps. REITs are my focus, though I dabble in everything. Ranked 3rd on Seeking Alpha for Services stocks!To get notified when I release a new article simply hit the orange follow button above!Connect with me on Twitter!

Analyst’s Disclosure: I am/we are long BOWFF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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