TSX:HCG

Stock Analysis Report

Home Capital Group

Executive Summary

Home Capital Group Inc., through its subsidiary, Home Trust Company, provides deposit, mortgage lending, retail credit, and credit card issuing services in Canada.

Snowflake

Fundamentals

Undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Home Capital Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.1%

TSX:HCG

1.6%

CA Mortgage

1.2%

CA Market


1 Year Return

59.2%

TSX:HCG

21.2%

CA Mortgage

-0.4%

CA Market

HCG outperformed the Mortgage industry which returned 21.5% over the past year.

HCG outperformed the Market in Canada which returned -0.3% over the past year.


Share holder returns

HCGIndustryMarket
7 Day-1.1%1.6%1.2%
30 Day-2.4%3.7%3.3%
90 Day28.2%20.8%0.8%
1 Year59.2%59.2%27.1%21.2%3.1%-0.4%
3 Year-12.2%-13.9%42.6%26.4%18.0%7.4%
5 Year-47.8%-51.4%27.4%7.1%22.0%4.5%

Price Volatility Vs. Market

How volatile is Home Capital Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Home Capital Group undervalued based on future cash flows and its price relative to the stock market?

21%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Home Capital Group's share price is below the future cash flow value, and at a moderate discount (> 20%).

Home Capital Group's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Home Capital Group is good value based on earnings compared to the CA Mortgage industry average.

Home Capital Group is good value based on earnings compared to the Canada market.


Price Based on Expected Growth

Home Capital Group is good value based on expected growth next year.


Price Based on Value of Assets

Home Capital Group is good value based on assets compared to the CA Mortgage industry average.


Next Steps

Future Growth

How is Home Capital Group expected to perform in the next 1 to 3 years based on estimates from 9 analysts?

16.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Home Capital Group's revenue is expected to grow by 9.5% yearly, however this is not considered high growth (20% yearly).

Home Capital Group's earnings are expected to grow by 16.6% yearly, however this is not considered high growth (20% yearly).

Home Capital Group's revenue growth is expected to exceed the Canada market average.

Home Capital Group's earnings growth is expected to exceed the Canada market average.

Home Capital Group's earnings growth is expected to exceed the low risk savings rate of 1.9%.


Earnings per Share Growth Estimates


Future Return on Equity

Home Capital Group is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

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

-28.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Home Capital Group's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.

Home Capital Group's 1-year earnings growth exceeds its 5-year average (2.7% vs -28.3%)

Home Capital Group's earnings growth has not exceeded the CA Mortgage industry average in the past year (2.7% vs 7.7%).


Return on Equity

Home Capital Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Home Capital Group used its assets less efficiently than the CA Mortgage industry average last year based on Return on Assets.


Return on Capital Employed

Unable to establish if Home Capital Group improved its use of capital last year versus 3 years ago (Return on Capital Employed) due to insufficient past data.


Next Steps

Financial Health

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


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Information is not available.

Information is not available.


Financial Institutions Analysis

Home Capital Group has an acceptable proportion of non-loan assets held.

Home Capital Group has a low allowance for bad loans.

Home Capital Group's liabilities are made up of primarily low risk sources of funding.

Home Capital Group's level of assets compared to its equity is moderate (i.e. an appropriate level of borrowing to fund lending).

Loans at Home Capital Group are broadly funded by customer deposits.

Home Capital Group has an acceptable level of bad loans (less than 2%).


Next Steps

Dividend

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

0.86%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Unable to evaluate Home Capital Group's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.

Unable to evaluate Home Capital Group's dividend against the top 25% market benchmark as the company has not reported any payouts.

Unable to perform a dividend volatility check as Home Capital Group has not reported any payouts.

Unable to verify if Home Capital Group's dividend has been increasing as the company has not reported any payouts.


Current Payout to Shareholders

Unable to calculate sustainability of dividends as Home Capital Group has not reported any payouts.


Future Payout to Shareholders

No need to calculate the sustainability of Home Capital Group's dividends in 3 years as they are not expected to pay a notable one for Canada.


Next Steps

Management

What is the CEO of Home Capital Group's salary, the management and board of directors tenure and is there insider trading?

1.9yrs

Average management tenure


CEO

Yousry Bissada (59yo)

2.1yrs

Tenure

CA$2,410,788

Compensation

Mr. Yousry Bissada has been President and Chief Executive Officer at Home Capital Group Inc. and Home Trust Company since August 3, 2017. Mr. Bissada has been the President and Chief Executive Officer at H ...


CEO Compensation Analysis

Yousry's remuneration is about average for companies of similar size in Canada.

Yousry's compensation has increased by more than 20% in the past year whilst earnings grew less than 20%.


Management Age and Tenure

1.9yrs

Average Tenure

The average tenure for the Home Capital Group management team is less than 2 years, this suggests a new team.


Board Age and Tenure

2.3yrs

Average Tenure

67yo

Average Age

The average tenure for the Home Capital Group board of directors is less than 3 years, this suggests a new board.


Insider Trading

More shares have been bought than sold by Home Capital Group individual insiders in the past 3 months.


Recent Insider Transactions

SellCA$10026 Aug 19
Dinah Henderson
EntityIndividual
Role
Chief Operating Officer
Executive Vice President of Operations
Shares4
Max PriceCA$24.99
BuyCA$125,35013 Aug 19
Bradley Kotush
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares5,000
Max PriceCA$25.07
BuyCA$880,81903 Jun 19
Sheng Chung
EntityIndividual
Shares49,300
Max PriceCA$17.96
BuyCA$1,233,25524 May 19
Sheng Chung
EntityIndividual
Shares66,800
Max PriceCA$18.51
BuyCA$2,553,56011 May 19
Sheng Chung
EntityIndividual
Shares144,700
Max PriceCA$18.10
BuyCA$6,82810 May 19
Sheng Chung
EntityIndividual
Shares400
Max PriceCA$17.07
BuyCA$115,82026 Dec 18
Yousry Bissada
EntityIndividual
Role
Chief Executive Officer
President
Shares8,000
Max PriceCA$14.48
BuyCA$99,33021 Dec 18
Claude Lamoureux
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares7,000
Max PriceCA$14.19
BuyCA$141,40021 Dec 18
Bradley Kotush
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares10,000
Max PriceCA$14.14
BuyCA$17,20029 Nov 18
Susan Hutchison
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceCA$17.20

Ownership Breakdown


Management Team

  • Yousry Bissada (59yo)

    President

    • Tenure: 2.1yrs
    • Compensation: CA$2.41m
  • Brad Kotush

    Executive VP & CFO

    • Tenure: 2yrs
    • Compensation: CA$873.01k
  • Ed Karthaus (60yo)

    Executive Vice President of Sales & Marketing

    • Tenure: 1.9yrs
  • Dinah Henderson

    Executive Vice President of Operations

    • Tenure: 0yrs
  • John Hong

    Senior VP

    • Tenure: 0yrs
  • Benjy Katchen

    Executive VP and Chief Digital & Strategy Officer

    • Tenure: 0yrs
    • Compensation: CA$838.88k
  • Laura Lepore

    Assistant Vice President

    • Tenure: 0yrs
  • Victor DiRisio

    Chief Information Officer

    • Tenure: 1.7yrs
    • Compensation: CA$739.15k
  • Amy Bruyea

    Senior Vice President of Human Resources

    • Tenure: 1.8yrs
  • Mark Hemingway

    General Counsel & Corporate Secretary

    • Tenure: 1.2yrs

Board Members

  • Paul Derksen (68yo)

    Chairman of the Board

    • Tenure: 1.3yrs
    • Compensation: CA$165.99k
  • Claude Lamoureux (76yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: CA$135.00k
  • Alan Hibben (66yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: CA$145.00k
  • Paul Haggis (67yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: CA$145.00k
  • Yousry Bissada (59yo)

    President

    • Tenure: 2.1yrs
    • Compensation: CA$2.41m
  • Sharon Sallows (70yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: CA$135.00k
  • Jim Lisson (68yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: CA$115.00k
  • Bob Blowes (66yo)

    Non-Independent Director

    • Tenure: 4.3yrs
    • Compensation: CA$115.00k
  • Lisa Ritchie (60yo)

    Independent Director

    • Tenure: 1.3yrs
    • Compensation: CA$72.03k
  • Sue Hutchison

    Independent Director

    • Tenure: 1yrs
    • Compensation: CA$28.75k

Company Information

Home Capital Group Inc.'s company bio, 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
  • Market Cap: CA$1.425b
  • Shares outstanding: 58.58m
  • 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HCGTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1982
7HCDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1982
HMCB.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 1982

Biography

Home Capital Group Inc., through its subsidiary, Home Trust Company, provides deposit, mortgage lending, retail credit, and credit card issuing services in Canada. It offers various deposit products, such  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/18 23:37
End of Day Share Price2019/09/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.