MCAN Mortgage Corp Stock (TSX:MKP) | Investing | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
MCAN Mortgage Corp Stock (TSX:MKP)
October 2, 2024
12:56 pm
Dean
Valhalla Mountains, British Columbia
Member
Members
Forum Posts: 2149
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

.
While doing my research on MCAN (with the intent of buying my first GIC with them), I became so intrigued & impressed with the company, that I ended up buying their Stock instead !

To be more conservative in my stock buying now, as a general rule I don't buy into small-caps anymore ... but I guess rules are made to be broken, eh ...
LOL sf-laugh

Does anyone else here own stock in MCAN (Ticker: MKP) ?

    Dean

P.S.
And their 'Sweet' Dividend (~8.70%)
is a very nice Added Bonus !

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

October 2, 2024
4:28 pm
zgic
Member
Members
Forum Posts: 150
Member Since:
August 30, 2023
sp_UserOfflineSmall Offline

what a massive drop today in their 1 year GIC from 4.75% to 4.35%sf-surprised

October 2, 2024
4:46 pm
Dean
Valhalla Mountains, British Columbia
Member
Members
Forum Posts: 2149
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

.
True ... But this thread/subject is about MCAN's 'Stock' (Ticker: MKP).

To discuss their 'GICs', please go here

.
Thanks sf-smile

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

October 2, 2024
7:16 pm
canadian.100
Member
Members
Forum Posts: 975
Member Since:
September 7, 2018
sp_UserOfflineSmall Offline

Dean said
.
While doing my research on MCAN (with the intent of buying my first GIC with them), I became so intrigued & impressed with the company, that I ended up buying their Stock instead !

To be more conservative in my stock buying now, as a general rule I don't buy into small-caps anymore ... but I guess rules are made to be broken, eh ...
LOL sf-laugh

Does anyone else here own stock in MCAN (Ticker: MKP) ?

    Dean

P.S.
And their 'Sweet' Dividend (~8.70%)
is a very nice Added Bonus !  

I have reviewed their financial statements and they certainly are doing very well. Rising share value and generous dividend seem to have rewarded investors nicely. I can understand why you are buying some of their shares instead of the 4.35% GIC.

October 3, 2024
8:57 am
Wrayzor
GTA
Member
Members
Forum Posts: 91
Member Since:
March 14, 2023
sp_UserOfflineSmall Offline

Dean said

And their 'Sweet' Dividend (~8.70%)
is a very nice Added Bonus !  

Not suggesting anything about the value of the investment, just an FYI - "Regular dividends are taxed as interest income to MCAN’s shareholders" (from MCAN site).

October 3, 2024
10:04 am
Dean
Valhalla Mountains, British Columbia
Member
Members
Forum Posts: 2149
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

.
Thanks for that , Wrayzor.

A good note for others ... but in my case, it doesn't apply. The investment account I bought MCAN stocks in, is a 'TFSA' investment account.

No tax (regardless of type) gonna happen there ! sf-smile

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

October 3, 2024
1:07 pm
Loonie
Member
Members
Forum Posts: 9391
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Why would the dividends be taxed as interest, not as dividends? Is this a US company or something like that?

October 3, 2024
2:21 pm
Wrayzor
GTA
Member
Members
Forum Posts: 91
Member Since:
March 14, 2023
sp_UserOfflineSmall Offline

They are a Canadian company, from what I've seen, but they're set up as a "Mortgage Investment Corporation" and flow through their income, which I gather is primarily interest. I don't even pretend to be a corporate tax expert, so I don't know the ins and outs of the rationale.

October 3, 2024
2:39 pm
Dean
Valhalla Mountains, British Columbia
Member
Members
Forum Posts: 2149
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

Loonie said

Why would the dividends be taxed as interest, not as dividends? Is this a US company or something like that?  

I've seen this happen before, with other stocks I've owned (dividends taxed as interest).

Like Wrayzor, I'm no corporate tax expert ... but I think it has something to do with the source(s) of company/corporate income.

At any rate, it is what it is ... C'est La Vie ! sf-smile

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

October 5, 2024
12:02 pm
musicalmaestro
Ottawa
Member
Members
Forum Posts: 60
Member Since:
January 15, 2014
sp_UserOfflineSmall Offline

shh, it's a secret (about this stock which provides residential mortgages during a housing crisis).

Joking aside in case someone stumbles across this and is interested I had created a thread related to their relatively new ability to buy GIC'S from them without a broker that may contain some useful tidbits. https://www.highinterestsavings.ca/forum/gic/new-mcan-financial-digital-gics-no-more-need-for-a-broker/page-3/

October 5, 2024
1:09 pm
Norman1
Member
Members
Forum Posts: 7171
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Wrayzor said
They are a Canadian company, from what I've seen, but they're set up as a "Mortgage Investment Corporation" and flow through their income, which I gather is primarily interest. I don't even pretend to be a corporate tax expert, so I don't know the ins and outs of the rationale.

Chartered Professional Accountants (BC) article The Rise of the Mortgage Investment Corporation: A hit 40 years in the making has a history of mortgage investment corporations in Canada.

A Canadian corporation that meets certain requirements under the Income Tax Act is a mortgage investment corporation. A mortgage investment corporation is allowed to deduct income distributed to shareholders from its taxable income and pay no income tax on that income. An ordinary corporation cannot do this.

Since no corporate tax was paid on the income distributed, the distribution is not an eligible dividend or an other-than-eligible dividend. There is no gross-up and no dividend tax credit.

October 5, 2024
1:42 pm
Lodown
Member
Members
Forum Posts: 249
Member Since:
January 10, 2017
sp_UserOfflineSmall Offline

What about the looming housing crash in Canada if rates do not come down sufficiently or fast enough? Why is MKP better than any of the banks which have much greater growth prospects? Rather than buy MKP as a risk investment, I would say buy the big 6 banks as they are better risk investments.

October 5, 2024
2:43 pm
musicalmaestro
Ottawa
Member
Members
Forum Posts: 60
Member Since:
January 15, 2014
sp_UserOfflineSmall Offline

Lodown said
What about the looming housing crash in Canada if rates do not come down sufficiently or fast enough? Why is MKP better than any of the banks which have much greater growth prospects? Rather than buy MKP as a risk investment, I would say buy the big 6 banks as they are better risk investments.  

Much greater growth prospects? How do?

While Mortgages play a significant part of what banks make money from the big 5 are BIG for a reason in that they are somewhat diversified have massive assets under management.

I think one advantage MKP has is that comparatively speaking its assets under management are smaller and the rules of very large numbers suggest to me that MKP in fact has a longer runway to take off from.

Whether either will beat out the other is anyone's guess . I think both could be part of someone's portfolio if it matches their risk tolerance, but I wouldn't replace banks with MKP as I see them as very different assets.

October 5, 2024
7:47 pm
Lodown
Member
Members
Forum Posts: 249
Member Since:
January 10, 2017
sp_UserOfflineSmall Offline

ZEB-vs-MKP.png

ETF ZEB represents the big six banks with equal weights. The results would be even better, if the big 6 were purchased directly, instead of via this ETF that charges an Admin fee. Of course, "past performance is no guarantee of future results"......especially if the housing crash comes to pass."

MKP is the same as the banks, as the chart above shows they track up and down in the same manner.

October 6, 2024
5:58 am
musicalmaestro
Ottawa
Member
Members
Forum Posts: 60
Member Since:
January 15, 2014
sp_UserOfflineSmall Offline

Lodown said

ETF ZEB represents the big six banks with equal weights. The results would be even ...

MKP is the same as the banks, as the chart above shows they track up and down in the same manner.  

Thanks for bringing this up. I did some digging, and it turns out MKP and the bank ETF (ZEB) are only moderately correlated (about 0.65) according to portfolio visualizer. So they're not the exact same at all. Which got me curious as to why that might be. So I compared it to things like Home Depot and some mortgage backed ETFs (MBB) and discovered that it's like it's tied to housing stuff, but in a broader way than just mortgages. Banks seem to carry a greater correlation with Home Depot suggesting their price may be more driven by consumer confidence and spending while MKP less so. That said MKP's price seemed to be equally influence by things like mortgage backed loans nearly at nearly 2x the correlation compared to ZEB so more so than banks (which I found surprising). So if you're thinking about MKP vs Banks, don't just compare it to the housing market. MKP might actually give you exposure to housing market trends and consumer confidence in a unique way. Although they rhyme with the ZEB ETF there's no guarantee this will or will not be the case moving forward.

IMO, MKP could fit in a portfolio, but maybe not for the reasons we first thought. It's not just a bank alternative - it's its own beast that picks up on mortgage backed loans and consumer spending in an interesting way I think. So don't write off the big banks, but don't dismiss MKP either. They each might have their own role to play in a mix-and-match portfolio. Just make sure you know what you're getting into and how their dividends are taxed.

Portoflio visualizer correlation matrix: https://www.portfoliovisualizer.com/asset-correlations?s=y&sl=6ROHAh9JpltB8iFnBp4OcF

October 6, 2024
9:58 am
Norman1
Member
Members
Forum Posts: 7171
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Mortgage investment corporations are not banks. They risk losing their special treatment under the Income Tax Act if they start doing many of the things the chartered banks and other lenders do.

Those price chart comparisons are also meaningless. Mortgage investment corporations pay out almost all their earnings to shareholders and don't pay regular corporate income taxes. Banks are not like that.

The actual returns to mortgage investment corporation shareholders are much higher than the charts of their stock price show.

Dean mentioned an 8%+ dividend annually for MCAN. The actual return to an shareholder is much more than what is shown in MCAN's price chart. Return is even higher if the dividend was reinvested in additional shares!

These are the returns from Seeking Alpha for MKP:CA and ZEB:CA:

MKP:CA YTD 1Y 3Y 5Y
Price return 14.41% 19.21% 8.43% 29.22%
Total return 20.02% 28.04% 38.72% 95.78%
ZEB:CA YTD 1Y 3Y 5Y
Price return 14.41% 31.98% 11.63% 39.32%
Total return 18.05% 37.42% 26.56% 71.55%
October 8, 2024
2:06 pm
Dean
Valhalla Mountains, British Columbia
Member
Members
Forum Posts: 2149
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

Lodown said

What about the looming housing crash in Canada if rates do not come down sufficiently or fast enough? Why is MKP better than any of the banks which have much greater growth prospects? Rather than buy MKP as a risk investment, I would say buy the big 6 banks as they are better risk investments.  

Bin there ... Done that . sf-smile

I've been Heavily invested in the stocks of four of the 'Big Six' for quite a few years now.

Buying into MCAN (Ticker: MKP) was for me an opportunity to diversify into
a very well run Mortgage Company. And that 'Very Sweet' dividend, is an
added Bonus.

    Dean

P.S.
And FWIW . . .
As far as I know, No-One here
(including myself) has Ever
said that MKP was better
than any of the banks ❗

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

November 22, 2024
12:47 pm
Martster
Member
Members
Forum Posts: 26
Member Since:
July 7, 2022
sp_UserOfflineSmall Offline

Curious about the sudden departure of the CEO this week - and in April this year, the CFO leaving effective immediately - but financials are still good. Something brewing here?

I too am interested in buying stocks with good dividends ... but my Spidey senses are tingling a bit.

November 24, 2024
12:40 pm
Dean
Valhalla Mountains, British Columbia
Member
Members
Forum Posts: 2149
Member Since:
January 12, 2019
sp_UserOfflineSmall Offline

.
Yes ... I saw that in the news too, last week.

It's been several days now, and there's still no indication of any wrongdoing, or bad/poor performance by either those persons involved, or the company.

MCAN and its stock (MKP) continues to carry on with their good performance. Over the year, MKP has gone Up by over 27%. And 'Yes' ... I'm still liking that Sweet Dividend (~8%).

All still appears Well & Good.

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

Please write your comments in the forum.