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Email this12:56 pm
January 12, 2019
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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 
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 !
" Live Long, Healthy ... And Prosper! "
4:28 pm
August 30, 2023
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what a massive drop today in their 1 year GIC from 4.75% to 4.35%
4:46 pm
January 12, 2019
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True ⬆ ... But this thread/subject is about MCAN's 'Stock' (Ticker: MKP).
To discuss their 'GICs', please go here ⬇
.
Thanks 
- Dean
" Live Long, Healthy ... And Prosper! "
7:16 pm
September 7, 2018
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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 ...
LOLDoes 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.
8:57 am
March 14, 2023
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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).
10:04 am
January 12, 2019
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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 !
- Dean
" Live Long, Healthy ... And Prosper! "
1:07 pm
October 21, 2013
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Why would the dividends be taxed as interest, not as dividends? Is this a US company or something like that?
2:21 pm
March 14, 2023
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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.
2:39 pm
January 12, 2019
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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 !
- Dean
" Live Long, Healthy ... And Prosper! "
12:02 pm
January 15, 2014
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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/
1:09 pm
April 6, 2013
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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.
1:42 pm
January 10, 2017
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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.
2:43 pm
January 15, 2014
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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.
7:47 pm
January 10, 2017
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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.
5:58 am
January 15, 2014
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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
9:58 am
April 6, 2013
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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% |
2:06 pm
January 12, 2019
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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 ⬆.
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 ❗
" Live Long, Healthy ... And Prosper! "
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