Home Capital Group Inc (HCG.CA)
CA4369131079 - Common Stock
We assign a fundamental rating of 4 out of 10 to HCG. HCG was compared to 35 industry peers in the Financial Services industry. There are concerns on the financial health of HCG while its profitability can be described as average. A decent growth rate in combination with a cheap valuation! Better keep an eye on HCG.
1. Profitability
1.1 Basic Checks
In the past year HCG was profitable.
HCG had a positive operating cash flow in the past year.
Each year in the past 5 years HCG has been profitable.
HCG had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
HCG has a Return On Assets (0.76%) which is in line with its industry peers.
Looking at the Return On Equity, with a value of 10.50%, HCG belongs to the top of the industry, outperforming 88.10% of the companies in the same industry.
| Industry Rank | Sector 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
1.3 Margins
HCG has a Profit Margin of 32.48%. This is in the better half of the industry: HCG outperforms 61.90% of its industry peers.
In the last couple of years the Profit Margin of HCG has grown nicely.
HCG does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.
| Industry Rank | Sector 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
2. Health
2.1 Basic Checks
HCG does not have a ROIC to compare to the WACC, probably because it is not profitable.
HCG has less shares outstanding than it did 1 year ago.
The number of shares outstanding for HCG has been reduced compared to 5 years ago.
Compared to 1 year ago, HCG has an improved debt to assets ratio.
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.
The Debt to FCF ratio of HCG (10.76) is better than 69.05% of its industry peers.
A Debt/Equity ratio of 2.66 is on the high side and indicates that HCG has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.66, HCG is doing worse than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.66 | ||
| Debt/FCF | 10.76 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC9.09%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
HCG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.63%, which is quite good.
Measured over the past 5 years, HCG shows a small growth in Earnings Per Share. The EPS has been growing by 3.16% on average per year.
The Revenue has been growing slightly by 3.26% in the past year.
The Revenue has been growing slightly by 5.33% on average over the past years.
EPS 1Y (TTM)16.63%
EPS 3Y19.14%
EPS 5Y3.16%
EPS growth Q2Q61.86%
Revenue 1Y (TTM)3.26%
Revenue growth 3Y2.83%
Revenue growth 5Y5.33%
Revenue growth Q2Q22.69%
3.2 Future
HCG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 27.46% yearly.
HCG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.06% yearly.
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.
4. Valuation
4.1 Price/Earnings Ratio
HCG is valuated reasonably with a Price/Earnings ratio of 9.14.
Compared to the rest of the industry, the Price/Earnings ratio of HCG indicates a rather cheap valuation: HCG is cheaper than 83.33% of the companies listed in the same industry.
HCG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.60.
HCG is valuated cheaply with a Price/Forward Earnings ratio of 7.00.
Based on the Price/Forward Earnings ratio, HCG is valued cheaper than 80.95% of the companies in the same industry.
HCG is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.15, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.14 | ||
| Fwd PE | 7 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, HCG is valued cheaply inside the industry as 95.24% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.13 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
HCG's 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
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.36%, HCG has a reasonable but not impressive dividend return.
With a Dividend Yield of 1.36, HCG pays less dividend than the industry average, which is at 7.85. 85.71% of the companies listed in the same industry pay a better dividend than HCG!
Compared to an average S&P500 Dividend Yield of 2.32, HCG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.36% |
5.2 History
The dividend of HCG decreases each year by -3.09%.
HCG does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)-3.09%
Div Incr Years0
Div Non Decr Years0
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
Home Capital Group Inc
TSX:HCG (9/1/2023, 6:00:00 PM)
44.26
0 (0%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap1.69B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.36% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(16)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.14 | ||
| Fwd PE | 7 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.17
PEG (5Y)2.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.76% | ||
| ROE | 10.5% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | N/A | ||
| PM (TTM) | 32.48% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.66 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)16.63%
EPS 3Y19.14%
EPS 5Y
EPS growth Q2Q
EPS Next Y52.54%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.26%
Revenue growth 3Y2.83%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y