Report

Reports Highest Ever Q2 Revenue / Lower Rates Fuel Growth Prospects

Atrium Mortgage Investment Corporation (TSX: AI) reported its highest-ever Q2 revenue in 2024, with a 6% year-over-year increase, despite challenges in the sector. The company's earnings per share (EPS) were down 20% YoY due to higher loan loss provisions, leading to a 5% miss on estimates. The annual regular dividend remained steady at $0.90 per share. Loan advancements surged 53% YoY, driving mortgage receivables to a record high of $908 million.

However, concerns arose over a $50 million mortgage reclassified to stage three (impaired), signaling potential risks. Management is actively seeking to liquidate the collateral. Consequently, the 2024 loan loss provision estimate has been raised by 13% to $17 million, and the dividend forecast has been lowered by 5% to $1.04 per share, yielding 9.4%. Despite these challenges, AI is expected to benefit from the Bank of Canada's rate cuts, boosting transaction volumes in the latter half of 2024. The overall outlook for MIC/financial stocks remains bullish, with anticipated rallies as rate cuts take effect.
Underlying
Atrium Mortgage Investment Corporation

Provider
Fundamental Research
Fundamental Research

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Analysts
Sid Rajeev

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