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HCG

Home Capital Group TSX:HCG Stock Report

Last Price

CA$26.03

Market Cap

CA$1.1b

7D

-0.1%

1Y

-29.0%

Updated

27 Jun, 2022

Data

Company Financials +
HCG fundamental analysis
Snowflake Score
Valuation6/6
Future Growth1/6
Past Performance3/6
Financial Health5/6
Dividends4/6

HCG Stock Overview

Home Capital Group Inc., through its subsidiary, Home Trust Company, provides residential and nonresidential mortgage lending, securitization of residential mortgage products, consumer lending, and credit card services in Canada.

Home Capital Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Home Capital Group
Historical stock prices
Current Share PriceCA$26.03
52 Week HighCA$46.92
52 Week LowCA$24.49
Beta1.89
1 Month Change-13.00%
3 Month Change-31.75%
1 Year Change-29.02%
3 Year Change34.24%
5 Year Change53.21%
Change since IPO4,954.37%

Recent News & Updates

May 07
Need To Know: Analysts Just Made A Substantial Cut To Their Home Capital Group Inc. (TSE:HCG) Estimates

Need To Know: Analysts Just Made A Substantial Cut To Their Home Capital Group Inc. (TSE:HCG) Estimates

The analysts covering Home Capital Group Inc. ( TSE:HCG ) delivered a dose of negativity to shareholders today, by...

Shareholder Returns

HCGCA MortgageCA Market
7D-0.1%2.0%0.3%
1Y-29.0%-20.7%-4.0%

Return vs Industry: HCG underperformed the Canadian Mortgage industry which returned -20.7% over the past year.

Return vs Market: HCG underperformed the Canadian Market which returned -4% over the past year.

Price Volatility

Is HCG's price volatile compared to industry and market?
HCG volatility
HCG Average Weekly Movement6.0%
Mortgage Industry Average Movement3.2%
Market Average Movement10.0%
10% most volatile stocks in CA Market17.3%
10% least volatile stocks in CA Market4.4%

Stable Share Price: HCG is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: HCG's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1986809Yousry Bissadahttps://www.homecapital.com

Home Capital Group Inc., through its subsidiary, Home Trust Company, provides residential and nonresidential mortgage lending, securitization of residential mortgage products, consumer lending, and credit card services in Canada. It offers deposits through brokers and financial planners under the Oaken Financial brand. The company also provides credit card and line of credit services, including Equityline Visa product, a home equity line of credit that is secured by residential property; and cash-secured and unsecured credit card products.

Home Capital Group Fundamentals Summary

How do Home Capital Group's earnings and revenue compare to its market cap?
HCG fundamental statistics
Market CapCA$1.09b
Earnings (TTM)CA$224.95m
Revenue (TTM)CA$557.15m

4.9x

P/E Ratio

0.7x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HCG income statement (TTM)
RevenueCA$557.15m
Cost of RevenueCA$0
Gross ProfitCA$557.15m
Other ExpensesCA$332.20m
EarningsCA$224.95m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)5.30
Gross Margin100.00%
Net Profit Margin40.37%
Debt/Equity Ratio305.8%

How did HCG perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

3%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is HCG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HCG?

Other financial metrics that can be useful for relative valuation.

HCG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio0.8x

Price to Earnings Ratio vs Peers

How does HCG's PE Ratio compare to its peers?

HCG PE Ratio vs Peers
The above table shows the PE ratio for HCG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average9.2x
EQB EQB
6.1x13.7%CA$1.9b
FN First National Financial
10.5x3.7%CA$2.0b
MKP MCAN Mortgage
8.3xn/aCA$533.6m
AI Atrium Mortgage Investment
11.9x2.6%CA$507.4m
HCG Home Capital Group
4.9x6.1%CA$1.1b

Price-To-Earnings vs Peers: HCG is good value based on its Price-To-Earnings Ratio (4.9x) compared to the peer average (9.2x).


Price to Earnings Ratio vs Industry

How does HCG's PE Ratio compare vs other companies in the North American Mortgage Industry?

Price-To-Earnings vs Industry: HCG is good value based on its Price-To-Earnings Ratio (4.9x) compared to the Canadian Mortgage industry average (8.2x)


Price to Earnings Ratio vs Fair Ratio

What is HCG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HCG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio4.9x
Fair PE Ratio11.5x

Price-To-Earnings vs Fair Ratio: HCG is good value based on its Price-To-Earnings Ratio (4.9x) compared to the estimated Fair Price-To-Earnings Ratio (11.5x).


Share Price vs Fair Value

What is the Fair Price of HCG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HCG (CA$26.03) is trading below our estimate of fair value (CA$111.48)

Significantly Below Fair Value: HCG is trading below fair value by more than 20%.


Price to Earnings Growth Ratio

PEG Ratio: HCG is good value based on its PEG Ratio (0.8x)


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Future Growth

How is Home Capital Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


6.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HCG's forecast earnings growth (6.1% per year) is above the savings rate (1.6%).

Earnings vs Market: HCG's earnings (6.1% per year) are forecast to grow slower than the Canadian market (8.2% per year).

High Growth Earnings: HCG's earnings are forecast to grow, but not significantly.

Revenue vs Market: HCG's revenue (4.1% per year) is forecast to grow slower than the Canadian market (6.9% per year).

High Growth Revenue: HCG's revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HCG's Return on Equity is forecast to be low in 3 years time (13.6%).


Discover growth companies

Past Performance

How has Home Capital Group performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


24.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HCG has high quality earnings.

Growing Profit Margin: HCG's current net profit margins (40.4%) are higher than last year (38.2%).


Past Earnings Growth Analysis

Earnings Trend: HCG's earnings have grown significantly by 24% per year over the past 5 years.

Accelerating Growth: HCG's earnings growth over the past year (5.9%) is below its 5-year average (24% per year).

Earnings vs Industry: HCG earnings growth over the past year (5.9%) underperformed the Mortgage industry 7.2%.


Return on Equity

High ROE: HCG's Return on Equity (14.1%) is considered low.


Discover strong past performing companies

Financial Health

How is Home Capital Group's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

5/6

Financial Health Score 5/6

  • Asset Level

  • Allowance for Bad Loans

  • Low Risk Liabilities

  • Loan Level

  • Low Risk Deposits

  • Level of Bad Loans

Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: HCG's Assets to Equity ratio (13.3x) is moderate.

Allowance for Bad Loans: HCG has a sufficient allowance for bad loans (136%).

Low Risk Liabilities: 74% of HCG's liabilities are made up of primarily low risk sources of funding.

Loan Level: HCG has an appropriate level of Loans to Assets ratio (92%).

Low Risk Deposits: HCG's Loans to Deposits ratio (135%) is high.

Level of Bad Loans: HCG has an appropriate level of bad loans (0.1%).


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Dividend

What is Home Capital Group current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


2.31%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: HCG's dividend (2.31%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: HCG's dividend (2.31%) is low compared to the top 25% of dividend payers in the Canadian market (5.33%).


Stability and Growth of Payments

Stable Dividend: HCG's dividend payments have been volatile in the past 10 years.

Growing Dividend: HCG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Earnings Coverage: With its low payout ratio (3.2%), HCG's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HCG's dividends in 3 years are forecast to be thoroughly covered by earnings (12.1% payout ratio).


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.6yrs

Average management tenure


CEO

Yousry Bissada (61 yo)

4.83yrs

Tenure

CA$2,855,502

Compensation

Mr. Yousry Bissada serves as Independent Director at FirstService Corporation since April 6, 2022. He has been President and Chief Executive Officer at Home Capital Group Inc. and Home Trust Company since...


CEO Compensation Analysis

Compensation vs Market: Yousry's total compensation ($USD2.22M) is above average for companies of similar size in the Canadian market ($USD1.57M).

Compensation vs Earnings: Yousry's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: HCG's management team is considered experienced (4.6 years average tenure).


Board Members

Experienced Board: HCG's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: HCG insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Home Capital Group Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Home Capital Group Inc.
  • Ticker: HCG
  • Exchange: TSX
  • Founded: 1986
  • Industry: Thrifts and Mortgage Finance
  • Sector: Banks
  • Implied Market Cap: CA$1.093b
  • Shares outstanding: 42.43m
  • Website: https://www.homecapital.com

Number of Employees


Location

  • Home Capital Group Inc.
  • 145 King Street West
  • Suite 2300
  • Toronto
  • Ontario
  • M5H 1J8
  • Canada

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/06/27 00:00
End of Day Share Price2022/06/27 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.