TSXV:TII

Stock Analysis Report

Terra Firma Capital

Executive Summary

Terra Firma Capital Corporation provides real estate financings secured by investment properties and real estate developments in Canada and the United States.

Rewards

PE ratio (6x) is below the Canadian market (15.8x)

Revenue is forecast to grow 56.97% per year

Earnings grew by 311.7% over the past year

Risk Analysis

Earnings have declined by -12.35% per year over past 5 years

Unstable dividend track record

Profit margins (62.8%) are lower than last year

Significant insider selling over the past 3 months

+ 1 more risk


Snowflake Analysis

Fair value with acceptable track record.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: TII has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.2%

TII

0.8%

CA Mortgage

0.8%

CA Market


1 Year Return

10.2%

TII

39.5%

CA Mortgage

10.5%

CA Market

Return vs Industry: TII underperformed the Canadian Mortgage industry which returned 40.2% over the past year.

Return vs Market: TII matched the Canadian Market which returned 10.5% over the past year.


Shareholder returns

TIIIndustryMarket
7 Day0.2%0.8%0.8%
30 Day-1.8%2.9%2.1%
90 Day2.0%10.2%6.4%
1 Year12.3%10.2%50.8%39.5%14.0%10.5%
3 Year-19.8%-21.3%67.4%45.1%16.8%6.3%
5 Year-12.3%-13.9%70.0%38.8%36.8%16.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Terra Firma Capital undervalued compared to its fair value and its price relative to the market?

6.05x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TII (CA$5.5) is trading above our estimate of fair value (CA$2.95)

Significantly Below Fair Value: TII is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TII is good value based on its PE Ratio (6x) compared to the Mortgage industry average (12.9x).

PE vs Market: TII is good value based on its PE Ratio (6x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate TII's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: TII is good value based on its PB Ratio (0.6x) compared to the CA Mortgage industry average (1.2x).


Next Steps

Future Growth

How is Terra Firma Capital forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

57.0%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if TII's forecast earnings growth is above the savings rate (1.4%).

Earnings vs Market: Insufficient data to determine if TII's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TII's revenue (57% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: TII's revenue (57% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if TII's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Terra Firma Capital performed over the past 5 years?

-12.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TII has high quality earnings.

Growing Profit Margin: TII's current net profit margins (62.8%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: TII's earnings have declined by -12.3% per year over the past 5 years.

Accelerating Growth: TII's earnings growth over the past year (311.7%) exceeds its 5-year average (-12.3% per year).

Earnings vs Industry: TII earnings growth over the past year (311.7%) exceeded the Mortgage industry 10.3%.


Return on Equity

High ROE: TII's Return on Equity (10.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Terra Firma Capital'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

Inventory Level: TII has a low level of unsold assets or inventory.

Debt Coverage by Assets: TII's debt is covered by short term assets (assets are 1.4x debt).


Financial Institutions Analysis

Asset Level: TII's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if TII has a sufficient allowance for bad loans.

Low Risk Liabilities: TII reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if TII has an acceptable proportion of non-loan assets held.

Low Risk Deposits: TII has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if TII has an appropriate level of bad loans.


Next Steps

Dividend

What is Terra Firma Capital's current dividend yield, its reliability and sustainability?

3.54%

Current Dividend Yield


Dividend Yield vs Market

company3.5%marketbottom25%1.9%markettop25%5.4%industryaverage9.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: TII's dividend (3.54%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: TII's dividend (3.54%) is low compared to the top 25% of dividend payers in the Canadian market (5.48%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether TII's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if TII's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (5.4%), TII's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

8.2yrs

Average board tenure


CEO

Glenn Watchorn 0

3.6yrs

Tenure

US$597,953

Compensation

Mr. Glenn Watchorn has been the Chief Executive Officer of Terra Firma Capital Corporation since June 1, 2016 and as its President since November 10, 2014. Mr. Watchorn served as the Chief Operating Office ...


CEO Compensation Analysis

Compensation vs Market: Glenn's total compensation ($USD457.67K) is above average for companies of similar size in the Canadian market ($USD165.67K).

Compensation vs Earnings: Glenn's compensation has increased by more than 20% in the past year.


Board Age and Tenure

8.2yrs

Average Tenure

67yo

Average Age

Experienced Board: TII's board of directors are considered experienced (8.2 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellCA$826,18409 Jan 20
John Kaplan
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares150,000
Max PriceCA$5.55
BuyCA$412,50007 Jan 20
Jeremy Scheetz
EntityIndividual
Role
Senior Key Executive
Managing Director
Shares75,000
Max PriceCA$5.50
BuyCA$10,11825 Sep 19
Carolyn Montgomery
EntityIndividual
Role
Senior Key Executive
MD & Principal Broker
Shares1,900
Max PriceCA$5.33
BuyCA$24,50016 Sep 19
Manokaran Thiyagarajah
EntityIndividual
Role
Chief Financial Officer
CFO & Corporate Secretary
Shares5,000
Max PriceCA$4.90
BuyCA$5,30016 Sep 19
Yisrael Meyer
EntityIndividual
Role
Senior Key Executive
Executive Vice Chairman
Shares1,000
Max PriceCA$5.30
SellCA$705,96003 Apr 19
StableView Asset Management Inc.
EntityCompany
Shares141,191.8
Max PriceCA$5.00

Ownership Breakdown

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


Management Team

  • Yisrael Meyer (55yo)

    Executive Vice Chairman

    • Compensation: US$428.00k
  • Jeremy Scheetz

    Managing Director

    • Glenn Watchorn

      CEO & President

      • Tenure: 3.6yrs
      • Compensation: US$597.95k
    • Carolyn Montgomery

      MD & Principal Broker

      • Compensation: US$274.20k
    • Mano Thiyagarajah

      CFO & Corporate Secretary

      • Tenure: 6.9yrs
      • Compensation: US$325.00k
    • John Kaplan

      Executive Chairman

      • Compensation: US$290.10k

    Board Members

    • Seymour Temkin (80yo)

      Independent Director

      • Tenure: 8.2yrs
      • Compensation: US$65.63k
    • Philip Reichmann (62yo)

      Lead Director

      • Compensation: US$52.50k
    • Chris Bart (67yo)

      Independent Director

      • Tenure: 12.4yrs
      • Compensation: US$59.06k
    • John Kaplan

      Executive Chairman

      • Compensation: US$290.10k
    • Jerry Patava

      Independent Director

      • Tenure: 2.4yrs
      • Compensation: US$31.25k

    Company Information

    Terra Firma Capital Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Terra Firma Capital Corporation
    • Ticker: TII
    • Exchange: TSXV
    • Founded: 2007
    • Industry: Thrifts and Mortgage Finance
    • Sector: Banks
    • Market Cap: CA$30.663m
    • Shares outstanding: 5.56m
    • Website: https://tfcc.ca

    Number of Employees


    Location

    • Terra Firma Capital Corporation
    • 22 St. Clair Avenue East
    • Suite 200
    • Toronto
    • Ontario
    • M4T 2S3
    • Canada

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    TIITSXV (TSX Venture Exchange)YesCommon SharesCACADJan 2008
    TFCC.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 2008

    Biography

    Terra Firma Capital Corporation provides real estate financings secured by investment properties and real estate developments in Canada and the United States. It arranges financings for residential buildings and mixed-use properties, as well as land for residential and commercial development, and construction projects. The company provides land loans registered in first or second position at the earlier stages of real estate development; term mortgages for the purposes of acquiring or refinancing income-producing properties; and mezzanine or subordinated debt financing. It offers real estate financing services to real estate developers and owners. Terra Firma Capital Corporation was incorporated in 2007 and is headquartered in Toronto, Canada. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/23 00:34
    End of Day Share Price2020/01/22 00:00
    Earnings2019/09/30
    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.