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Home Capital Group Inc (HCG.CA) Stock Fundamental Analysis

Canada - Toronto Stock Exchange - TSX:HCG - CA4369131079 - Common Stock

44.26 CAD
0 (0%)
Last: 9/1/2023, 7:00:00 PM
Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to HCG. HCG was compared to 28 industry peers in the Financial Services industry. HCG may be in some trouble as it scores bad on both profitability and health. HCG scores decently on growth, while it is valued quite cheap. This could make an interesting combination.


Dividend Valuation Growth Profitability Health

3

1. Profitability

1.1 Basic Checks

  • In the past year HCG was profitable.
  • HCG had a positive operating cash flow in the past year.
HCG.CA Yearly Net Income VS EBIT VS OCF VS FCFHCG.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 0 200M -200M 400M

1.2 Ratios

  • HCG has a Return On Assets of 0.76%. This is comparable to the rest of the industry: HCG outperforms 40.48% of its industry peers.
  • HCG has a better Return On Equity (10.50%) than 88.10% of its industry peers.
Industry RankSector Rank
ROA 0.76%
ROE 10.5%
ROIC N/A
ROA(3y)0.93%
ROA(5y)0.84%
ROE(3y)11.9%
ROE(5y)10.37%
ROIC(3y)N/A
ROIC(5y)N/A
HCG.CA Yearly ROA, ROE, ROICHCG.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 5 10 15

1.3 Margins

  • The Profit Margin of HCG (32.48%) is better than 61.90% of its industry peers.
  • HCG's Profit Margin has improved in the last couple of years.
  • HCG does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.
Industry RankSector Rank
OM N/A
PM (TTM) 32.48%
GM N/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y0.53%
PM growth 5Y72.9%
GM growth 3YN/A
GM growth 5YN/A
HCG.CA Yearly Profit, Operating, Gross MarginsHCG.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 10 20 30 40

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2

2. Health

2.1 Basic Checks

  • HCG does not have a ROIC to compare to the WACC, probably because it is not profitable.
  • The number of shares outstanding for HCG has been reduced compared to 1 year ago.
  • The debt/assets ratio for HCG has been reduced compared to a year ago.
HCG.CA Yearly Shares OutstandingHCG.CA Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 20M 40M 60M
HCG.CA Yearly Total Debt VS Total AssetsHCG.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 5B 10B 15B 20B

2.2 Solvency

  • The Debt to FCF ratio of HCG is 10.76, which is on the high side as it means it would take HCG, 10.76 years of fcf income to pay off all of its debts.
  • With a decent Debt to FCF ratio value of 10.76, HCG is doing good in the industry, outperforming 69.05% of the companies in the same industry.
  • HCG has a Debt/Equity ratio of 2.66. This is a high value indicating a heavy dependency on external financing.
  • HCG has a worse Debt to Equity ratio (2.66) than 66.67% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.66
Debt/FCF 10.76
Altman-Z N/A
ROIC/WACCN/A
WACC9.09%
HCG.CA Yearly LT Debt VS Equity VS FCFHCG.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 0 1B 2B 3B 4B

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
HCG.CA Yearly Current Assets VS Current LiabilitesHCG.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 100M 200M 300M 400M

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6

3. Growth

3.1 Past

  • The Earnings Per Share has grown by an nice 16.63% over the past year.
  • HCG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.16% yearly.
  • The Revenue has been growing slightly by 3.26% in the past year.
  • HCG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.33% yearly.
EPS 1Y (TTM)16.63%
EPS 3Y19.14%
EPS 5Y3.16%
EPS Q2Q%61.86%
Revenue 1Y (TTM)3.26%
Revenue growth 3Y2.83%
Revenue growth 5Y5.33%
Sales Q2Q%22.69%

3.2 Future

  • Based on estimates for the next years, HCG will show a very strong growth in Earnings Per Share. The EPS will grow by 27.46% on average per year.
  • The Revenue is expected to grow by 14.06% on average over the next years. This is quite good.
EPS Next Y52.54%
EPS Next 2Y27.46%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year22.24%
Revenue Next 2Y14.06%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
  • The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
HCG.CA Yearly Revenue VS EstimatesHCG.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M 500M
HCG.CA Yearly EPS VS EstimatesHCG.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2 4 6

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8

4. Valuation

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 9.14, the valuation of HCG can be described as very reasonable.
  • HCG's Price/Earnings ratio is rather cheap when compared to the industry. HCG is cheaper than 83.33% of the companies in the same industry.
  • When comparing the Price/Earnings ratio of HCG to the average of the S&P500 Index (27.33), we can say HCG is valued rather cheaply.
  • A Price/Forward Earnings ratio of 7.00 indicates a rather cheap valuation of HCG.
  • Based on the Price/Forward Earnings ratio, HCG is valued cheaper than 80.95% of the companies in the same industry.
  • The average S&P500 Price/Forward Earnings ratio is at 24.12. HCG is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 9.14
Fwd PE 7
HCG.CA Price Earnings VS Forward Price EarningsHCG.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80 100

4.2 Price Multiples

  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of HCG indicates a rather cheap valuation: HCG is cheaper than 95.24% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 4.13
EV/EBITDA N/A
HCG.CA Per share dataHCG.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

  • The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • HCG's earnings are expected to grow with 27.46% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.17
PEG (5Y)2.9
EPS Next 2Y27.46%
EPS Next 3YN/A

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2

5. Dividend

5.1 Amount

  • HCG has a Yearly Dividend Yield of 1.36%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average industry Dividend Yield of 5.69, HCG's dividend is way lower than its industry peers. On top of this 85.71% of the companies listed in the same industry pay a better dividend than HCG!
  • HCG's Dividend Yield is slightly below the S&P500 average, which is at 1.91.
Industry RankSector Rank
Dividend Yield 1.36%

5.2 History

  • The dividend of HCG decreases each year by -3.09%.
  • HCG is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)-3.09%
Div Incr Years0
Div Non Decr Years0
HCG.CA Yearly Dividends per shareHCG.CA Yearly Dividends per shareYearly Dividends per share 2022 2023 0.1 0.2 0.3 0.4 0.5

5.3 Sustainability

  • 13.23% of the earnings are spent on dividend by HCG. This is a low number and sustainable payout ratio.
DP13.23%
EPS Next 2Y27.46%
EPS Next 3YN/A
HCG.CA Yearly Income VS Free CF VS DividendHCG.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 0 200M -200M 400M
HCG.CA Dividend Payout.HCG.CA Dividend Payout, showing the Payout Ratio.HCG.CA Dividend Payout.PayoutRetained Earnings

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Home Capital Group Inc

TSX:HCG (9/1/2023, 7:00:00 PM)

44.26

0 (0%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)N/A
Earnings (Next)02-17
Inst Owners32.83%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap1.69B
Revenue(TTM)536.27M
Net Income(TTM)174.16M
Analysts48.89
Price Target44.88 (1.4%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1.36%
Yearly Dividend0.6
Dividend Growth(5Y)-3.09%
DP13.23%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)24.31%
Min EPS beat(2)23.76%
Max EPS beat(2)24.86%
EPS beat(4)2
Avg EPS beat(4)9.01%
Min EPS beat(4)-9.38%
Max EPS beat(4)24.86%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)16.03%
Min Revenue beat(2)14.03%
Max Revenue beat(2)18.03%
Revenue beat(4)4
Avg Revenue beat(4)16.39%
Min Revenue beat(4)14.03%
Max Revenue beat(4)18.03%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)2.02%
EPS NQ rev (3m)13.67%
EPS NY rev (1m)0%
EPS NY rev (3m)12.38%
Revenue NQ rev (1m)-3.4%
Revenue NQ rev (3m)13.26%
Revenue NY rev (1m)0%
Revenue NY rev (3m)7.83%
Valuation
Industry RankSector Rank
PE 9.14
Fwd PE 7
P/S 3.15
P/FCF 4.13
P/OCF 4
P/B 1.02
P/tB 1.06
EV/EBITDA N/A
EPS(TTM)4.84
EY10.94%
EPS(NY)6.32
Fwd EY14.28%
FCF(TTM)10.72
FCFY24.22%
OCF(TTM)11.07
OCFY25%
SpS14.03
BVpS43.41
TBVpS41.75
PEG (NY)0.17
PEG (5Y)2.9
Graham NumberN/A
Profitability
Industry RankSector Rank
ROA 0.76%
ROE 10.5%
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) 32.48%
GM N/A
FCFM 76.38%
ROA(3y)0.93%
ROA(5y)0.84%
ROE(3y)11.9%
ROE(5y)10.37%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y0.53%
PM growth 5Y72.9%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.02
Health
Industry RankSector Rank
Debt/Equity 2.66
Debt/FCF 10.76
Debt/EBITDA N/A
Cap/Depr 69.37%
Cap/Sales 2.47%
Interest Coverage N/A
Cash Conversion N/A
Profit Quality 235.19%
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-Score7
WACC9.09%
ROIC/WACCN/A
Cap/Depr(3y)91.52%
Cap/Depr(5y)69.5%
Cap/Sales(3y)4.03%
Cap/Sales(5y)3.39%
Profit Quality(3y)113.41%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)16.63%
EPS 3Y19.14%
EPS 5Y3.16%
EPS Q2Q%61.86%
EPS Next Y52.54%
EPS Next 2Y27.46%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)3.26%
Revenue growth 3Y2.83%
Revenue growth 5Y5.33%
Sales Q2Q%22.69%
Revenue Next Year22.24%
Revenue Next 2Y14.06%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1YN/A
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y354.88%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y420.1%
OCF growth 3Y212.57%
OCF growth 5YN/A

Home Capital Group Inc / HCG.CA FAQ

What is the ChartMill fundamental rating of Home Capital Group Inc (HCG.CA) stock?

ChartMill assigns a fundamental rating of 4 / 10 to HCG.CA.


Can you provide the valuation status for Home Capital Group Inc?

ChartMill assigns a valuation rating of 8 / 10 to Home Capital Group Inc (HCG.CA). This can be considered as Undervalued.


How profitable is Home Capital Group Inc (HCG.CA) stock?

Home Capital Group Inc (HCG.CA) has a profitability rating of 4 / 10.


What is the financial health of Home Capital Group Inc (HCG.CA) stock?

The financial health rating of Home Capital Group Inc (HCG.CA) is 2 / 10.


Can you provide the expected EPS growth for HCG stock?

The Earnings per Share (EPS) of Home Capital Group Inc (HCG.CA) is expected to grow by 52.54% in the next year.