We assign a fundamental rating of 3 out of 10 to IVR. IVR was compared to 68 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. There are concerns on the financial health of IVR while its profitability can be described as average. IVR has a valuation in line with the averages, but on the other hand it scores bad on growth.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

IVR had positive earnings in the past year.
IVR had a positive operating cash flow in the past year.
IVR had negative earnings in 4 of the past 5 years.
Of the past 5 years IVR 4 years had a positive operating cash flow.

1.2 Ratios

IVR has a better Return On Assets (0.58%) than 61.76% of its industry peers.
IVR has a Return On Equity (4.48%) which is in line with its industry peers.
The Return On Invested Capital of IVR (0.65%) is better than 66.18% of its industry peers.
IVR had an Average Return On Invested Capital over the past 3 years of 0.85%. This is in line with the industry average of 1.28%.

		Industry Rank	Sector Rank
ROA	0.58%
ROE	4.48%
ROIC	0.65%

ROA(3y)-2.76%

ROA(5y)-5.95%

ROE(3y)-17.3%

ROE(5y)-37.42%

ROIC(3y)0.85%

ROIC(5y)1.09%

1.3 Margins

IVR has a Profit Margin of 11.74%. This is in the better half of the industry: IVR outperforms 64.71% of its industry peers.
IVR's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 16.72%, IVR is doing good in the industry, outperforming 64.71% of the companies in the same industry.
IVR's Operating Margin has declined in the last couple of years.
The Gross Margin of IVR (19.14%) is worse than 66.18% of its industry peers.
IVR's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	16.72%
PM (TTM)	11.74%
GM	19.14%

OM growth 3Y-57.18%

OM growth 5Y-28.55%

PM growth 3YN/A

PM growth 5Y-21.64%

GM growth 3Y-52.9%

GM growth 5Y-24.03%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

IVR has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

IVR has an Altman-Z score of -1.72. This is a bad value and indicates that IVR is not financially healthy and even has some risk of bankruptcy.
IVR has a Altman-Z score of -1.72. This is amonst the worse of the industry: IVR underperforms 98.53% of its industry peers.
The Debt to FCF ratio of IVR is 32.36, which is on the high side as it means it would take IVR, 32.36 years of fcf income to pay off all of its debts.
IVR has a better Debt to FCF ratio (32.36) than 83.82% of its industry peers.
A Debt/Equity ratio of 6.69 is on the high side and indicates that IVR has dependencies on debt financing.
IVR has a Debt to Equity ratio (6.69) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Debt/Equity	6.69
Debt/FCF	32.36
Altman-Z	-1.72

ROIC/WACCN/A

WACCN/A

2.3 Liquidity

A Current Ratio of 0.02 indicates that IVR may have some problems paying its short term obligations.
IVR has a worse Current ratio (0.02) than 98.53% of its industry peers.
IVR has a Quick Ratio of 0.02. This is a bad value and indicates that IVR is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.02, IVR is doing worse than 98.53% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	0.02
Quick Ratio	0.02

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

IVR shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -19.45%.
Measured over the past years, IVR shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -24.34% on average per year.

EPS 1Y (TTM)-19.45%

EPS 3Y-24.34%

EPS 5YN/A

EPS Q2Q%5.66%

Revenue 1Y (TTM)N/A

Revenue growth 3YN/A

Revenue growth 5YN/A

Sales Q2Q%-72.07%

3.2 Future

Based on estimates for the next years, IVR will show a decrease in Earnings Per Share. The EPS will decrease by -3.52% on average per year.
Based on estimates for the next years, IVR will show a decrease in Revenue. The Revenue will decrease by -0.26% on average per year.

EPS Next Y-5.85%

EPS Next 2Y-3.52%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year1.33%

Revenue Next 2Y-0.26%

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 3.77 indicates a rather cheap valuation of IVR.
Based on the Price/Earnings ratio, IVR is valued cheaper than 98.53% of the companies in the same industry.
When comparing the Price/Earnings ratio of IVR to the average of the S&P500 Index (28.39), we can say IVR is valued rather cheaply.
IVR is valuated cheaply with a Price/Forward Earnings ratio of 4.01.
Based on the Price/Forward Earnings ratio, IVR is valued cheaply inside the industry as 98.53% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of IVR to the average of the S&P500 Index (25.72), we can say IVR is valued rather cheaply.

		Industry Rank	Sector Rank
PE	3.77
Fwd PE	4.01

4.2 Price Multiples

IVR's Price/Free Cash Flow ratio is rather cheap when compared to the industry. IVR is cheaper than 95.59% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	3.97
EV/EBITDA	N/A

4.3 Compensation for Growth

A cheap valuation may be justified as IVR's earnings are expected to decrease with -3.52% in the coming years.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y-3.52%

EPS Next 3YN/A

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 5.36%, IVR is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 11.60, IVR's dividend is way lower than its industry peers. On top of this 91.18% of the companies listed in the same industry pay a better dividend than IVR!
Compared to an average S&P500 Dividend Yield of 1.82, IVR pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	5.36%

5.2 History

The dividend of IVR decreases each year by -36.18%.
IVR has been paying a dividend for at least 10 years, so it has a reliable track record.

Dividend Growth(5Y)-36.18%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

IVR pays out 317.17% of its income as dividend. This is not a sustainable payout ratio.
IVR's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.

DP317.17%

EPS Next 2Y-3.52%

EPS Next 3YN/A

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INVESCO MORTGAGE CAPITAL / IVR FAQ

What is the fundamental rating for IVR stock?

ChartMill assigns a fundamental rating of 4 / 10 to IVR.

Can you provide the valuation status for INVESCO MORTGAGE CAPITAL?

ChartMill assigns a valuation rating of 6 / 10 to INVESCO MORTGAGE CAPITAL (IVR). This can be considered as Fairly Valued.

What is the profitability of IVR stock?

INVESCO MORTGAGE CAPITAL (IVR) has a profitability rating of 4 / 10.

What are the PE and PB ratios of INVESCO MORTGAGE CAPITAL (IVR) stock?

The Price/Earnings (PE) ratio for INVESCO MORTGAGE CAPITAL (IVR) is 3.77 and the Price/Book (PB) ratio is 0.82.

What is the earnings growth outlook for INVESCO MORTGAGE CAPITAL?

The Earnings per Share (EPS) of INVESCO MORTGAGE CAPITAL (IVR) is expected to decline by -5.85% in the next year.