FIRSTSERVICE CORP. $55.55 - Toronto symbol FSV

FIRSTSERVICE CORP. $55.55 (Toronto symbol FSV; TSINetwork Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 34.7 million; Market cap: $2.0 billion; Dividend yield: 0.8%) serves the following areas of the real estate market: commercial real estate, residential property management and property improvement. The company has more than 24,000 employees worldwide.

In the quarter ended March 31, 2014, FirstService’s revenue rose 15.1%, to $548.4 million from $476.4 million a year earlier (all figures except share prices in U.S. dollars). Excluding one-time items, earnings per share were $0.09, compared to a loss of $0.20. The first quarter is typically a slower time for the company.

Revenue rosRe at all three of FirstService’s divisions: Colliers International (commercial real estate), up 28%; FirstService Residential (residential property management), up 7%; and FirstService Brands (property services), up 11%. FirstService Brands operates Paul Davis Restoration, California Closets and CertaPro Painters.

Growing in familiar markets

FirstService continues to grow by acquisition. Its latest purchase is Auckland-based Shore Commercial Realty, one of New Zealand’s leading commercial property brokerage firms, for an undisclosed amount. The move strengthens FirstService’s leading position in the Auckland metropolitan area, which is New Zealand’s largest.

The stock needs a continued recovery in global real estate markets to keep rising. Meanwhile, it trades at 23.2 times the $2.39 a share the company will likely earn this year.

FirstService is a hold.

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