Should you invest $1,000 in Ishares Trust - Ishares Nasdaq Biotechnology Etf right now?

Before you buy stock in Ishares Trust - Ishares Nasdaq Biotechnology Etf, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Ishares Trust - Ishares Nasdaq Biotechnology Etf wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

REIT Round-Up: Are These Real Estate Stocks Too Risky for 2019?

Morguard Real Estate Investment Trust (TSX:MRT.UN) is one of the best REITs on the TSX index. But is it the best?

| More on:

With increasing household debt, climbing house prices, and last year’s interest rate rises, it’s no wonder that real estate is such a hot topic in Canada at the moment. Indeed, with a surfeit of economic pressures facing the domestic market for 2019, some pundits are starting to wonder how the real estate industry might cope with a potential recession.

Let’s take a look at three of the biggest REITs currently trading on the TSX index and see which might be best placed to weather a hardening real estate market or whether they’re too much of a liability.

Morguard Real Estate Investment Trust (TSX:MRT.UN)

This popular choice is competitively valued and returns a decent dividend yield. However, a one-year past earnings growth of -14.1% signals that the last 12 months haven’t been great for Morguard REIT. Worse than that, though, is a five-year earnings average of -31.5%, which shows that the last half decade hasn’t been great, either.

What’s good about this stock is a pair of attractive multiples (see a P/E of 12.7 times earnings matched with a good P/B ratio of 0.5 times book), a chunky yield of 7.87%, and an expected 14% annual growth in earnings. What’s not so good is a high debt level of 83.9% of net worth. Can better REIT stats be found on the TSX index? Let’s find out.

Artis Real Estate Investment Trust (TSX:AX.UN)

Off to a good start already, Artis REIT’s one-year past earnings growth of 40% beats the average Canadian REITs’ year-on-year growth of 24.6%, and smashes its own 0.7% five-year average. However, with an even higher debt level than the previous stock’s, up at 94.9% of net worth, we’re back to square one.

A considerable amount of inside buying over the last three months shows that insider confidence is high, and is always a good indicator of how well an asset is expected to perform among those with a little extra insight. Perhaps that decent valuation signified by a low P/E of 8.4 times earnings and matching P/B of 0.7 times book looked good. Then again, it could have been that sizeable dividend yield of 5.31% or cheery outlook: Artis REIT is looking at a 12.4% expected increase in earnings.

Agellan Commercial Real Estate Investment Trust (TSX:ACR.UN)

This sturdy REIT also had a good year: a one-year past earnings growth of 21% just missed the Canadian REIT average for the same period of 24.6%, though overall its five-year average past earnings growth was higher at 38.1%. With a lower debt level than its competitors at 55.8% of net worth, Agellan Commercial REIT looks like a frontrunner.

Valuation looks good for this REIT, too, with a low P/E of 6.4 times earnings; however, a P/B ratio of 1.1 times book is very slightly over the per-asset asking price. That said, its share price is discounted by 39% compared to its future cash flow value, so value really is a flash word for Agellan Commercial REIT.

The bottom line

In summary, there’s a certain amount of risk in holding a stock with high debt attached, especially in such an uncertain economic environment. Investors looking for the best deal for a domestic REIT trading on the TSX index should weigh up a couple of things when it comes to frontrunner, Agellan Commercial REIT, however. On the one hand, it carries less debt than its competitors listed above, and pays a decent dividend yield of 5.69%. On the other, it’s looking at an expected -3% in earnings over the next one to three years, thereby undermining its appeal.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned.

More on Dividend Stocks

analyze data
Dividend Stocks

Why I’d Focus on Canadian Value Stocks for My Long-Term Portfolio

Canadian value stocks often provide income and growth that makes them great for long-term investing.

Read more »

woman looks at iPhone
Dividend Stocks

Investing $7,000 in Your TFSA? Consider These 2 Canadian ETFs for Retirement Planning

These two Canadian ETFs can be excellent long-term investments to add to your TFSA if you have contribution room available.

Read more »

ways to boost income
Dividend Stocks

Where I’d Invest $5,000 in Canadian Value Stocks During This Market Pullback

For patient, long-term investors, here are three discounted TSX stocks to have on your watch list right now.

Read more »

calculate and analyze stock
Dividend Stocks

Here’s How Many Shares of Brookfield Renewable You Should Own to Get $500 in Quarterly Dividends

If you want some dividends on deck, then consider this energy producer, which could provide that and more.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

Here’s Exactly How $15,000 in a TFSA Could Grow Into $215,000

If you're looking to grow your $15,000 investment into $200,000, here's exactly how to get it done.

Read more »

A worker gives a business presentation.
Dividend Stocks

Navigating Economic Headwinds and Buying the Dip

If you're looking to get in on the markets, but fearful of the market dip, then here's how to navigate…

Read more »

Canadian Dollars bills
Dividend Stocks

A 10% Dividend Stock Paying Cash Every Month

This dividend stock doesn't only offer a massive income, but a variety of investments during this volatile period.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Income-generating Stocks That Could Accelerate Your TFSA Growth in 2025

Generate tax-free passive income in your TFSA with these two stocks and grow your wealth.

Read more »