TSX:ECN

Stock Analysis Report

Executive Summary

ECN Capital Corp. originates, manages, and advises on prime consumer credit portfolios primarily in the United States.

Rewards

Trading at 43.7% below its fair value

Earnings are forecast to grow 102.2% per year

Risk Analysis

Dividend of 2.1% is not well covered by earnings



Snowflake Analysis

Reasonable growth potential and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-3.3%

ECN

-0.6%

CA Diversified Financial

0.4%

CA Market


1 Year Return

36.2%

ECN

51.3%

CA Diversified Financial

11.0%

CA Market

Return vs Industry: ECN underperformed the Canadian Diversified Financial industry which returned 51.3% over the past year.

Return vs Market: ECN exceeded the Canadian Market which returned 11% over the past year.


Shareholder returns

ECNIndustryMarket
7 Day-3.3%-0.6%0.4%
30 Day3.9%-1.5%0.01%
90 Day5.1%4.4%0.9%
1 Year38.5%36.2%54.8%51.3%14.7%11.0%
3 Year60.0%53.9%1.7%-7.1%15.1%4.6%
5 Yearn/a10.5%-20.6%37.8%17.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

43.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ECN (CA$4.74) is trading below our estimate of fair value (CA$8.41)

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


Price To Earnings Ratio

PE vs Industry: ECN is unprofitable, so we can't compare its PE Ratio to the Diversified Financial industry average.

PE vs Market: ECN is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: ECN is overvalued based on its PB Ratio (1.2x) compared to the CA Diversified Financial industry average (1.2x).


Next Steps

Future Growth

How is ECN Capital forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

102.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ECN is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.4%).

Earnings vs Market: ECN is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: ECN's is expected to become profitable in the next 3 years.

Revenue vs Market: ECN's revenue (16.9% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: ECN's revenue (16.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ECN's Return on Equity is forecast to be low in 3 years time (12.6%).


Next Steps

Past Performance

How has ECN Capital performed over the past 5 years?

-71.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ECN is currently unprofitable.

Growing Profit Margin: ECN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ECN is unprofitable, and losses have increased over the past 5 years at a rate of -71.7% per year.

Accelerating Growth: Unable to compare ECN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ECN is unprofitable, making it difficult to compare its past year earnings growth to the Diversified Financial industry (30.2%).


Return on Equity

High ROE: ECN has a negative Return on Equity (-0.47%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ECN 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: ECN has a low level of unsold assets or inventory.

Debt Coverage by Assets: ECN's debt is covered by short term assets (assets are 1.9x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

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

2.10%

Current Dividend Yield


Upcoming Dividend Payment

Purchase ECN Capital before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.1%marketbottom25%2.0%markettop25%5.6%industryaverage1.9%forecastin3Years2.4%

Current dividend yield vs market & industry

Notable Dividend: ECN's dividend (2.1%) is higher than the bottom 25% of dividend payers in the Canadian market (2.01%).

High Dividend: ECN's dividend (2.1%) is low compared to the top 25% of dividend payers in the Canadian market (5.57%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ECN has been paying a dividend for less than 10 years.

Growing Dividend: ECN's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: ECN is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: ECN's dividends in 3 years are forecast to be well covered by earnings (25.3% payout ratio).


Next Steps

Management

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

1.9yrs

Average management tenure


CEO

Steve Hudson (60yo)

3.2yrs

Tenure

US$4,247,126

Compensation

Mr. Steven K. Hudson, also known as Steve, FCA, B.B.A., FCPA, is the Founder and Principal of Cameron Capital Corporation. Mr. Hudson has been the Chief Executive Officer and Executive Director of ECN Capi ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD4.25M) is above average for companies of similar size in the Canadian market ($USD1.61M).

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


Management Age and Tenure

1.9yrs

Average Tenure

Experienced Management: ECN's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Age and Tenure

3.2yrs

Average Tenure

62.5yo

Average Age

Experienced Board: ECN's board of directors are considered experienced (3.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$130,24319 Aug 19
Kyle Morabito
EntityIndividual
Shares28,000
Max PriceUS$4.65
BuyUS$62,02014 Aug 19
Karen Martin
EntityIndividual
Role
Member of the Board of Directors
Director
Shares20,000
Max PriceUS$3.10
BuyUS$660,38014 Aug 19
Michael Lepore
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares141,500
Max PriceUS$4.67
BuyUS$108,48114 Aug 19
Paul Stoyan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares22,000
Max PriceUS$4.94
BuyUS$126,51322 Mar 19
David Morris
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares29,000
Max PriceUS$4.38
BuyUS$126,91606 Mar 19
Carol Goldman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares30,000
Max PriceUS$4.23

Ownership Breakdown

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


Management Team

  • Randall Lyle Yasny

    Senior Vice President of Corporate

    • Tenure: 0yrs
  • Don Glisson (59yo)

    Chief Executive Officer of Triad Financial Services

    • Tenure: 1.9yrs
  • Steve Grosso

    Chief Operating Officer of US

    • Tenure: 0yrs
  • Steve Hudson (60yo)

    CEO & Director

    • Tenure: 3.2yrs
    • Compensation: US$4.25m
  • John Wimsatt

    Head of Corporate Development & Investor Relations

    • Tenure: 2.9yrs
  • Mark Berch

    President of Service Finance

    • Tenure: 2.3yrs
  • Algis Vaitonis

    Chief Credit Officer

    • Tenure: 0yrs
  • Ian Berch

    Chief Operating Officer of Service Finance

    • Tenure: 1.9yrs
  • Michael Lepore

    Chief Financial Officer

    • Tenure: 0.8yrs
    • Compensation: US$3.31m
  • Mary Koenig

    Chief Legal Officer

    • Tenure: 0.9yrs

Board Members

  • Paul Stoyan (60yo)

    Independent Director

    • Tenure: 3.2yrs
    • Compensation: US$63.95k
  • Carol Goldman (61yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$185.00k
  • Steve Hudson (60yo)

    CEO & Director

    • Tenure: 3.2yrs
    • Compensation: US$4.25m
  • Bill Lovatt (66yo)

    Independent Chairman of the Board

    • Tenure: 3.2yrs
    • Compensation: US$535.00k
  • Pierre Lortie (72yo)

    Independent Director

    • Tenure: 3.2yrs
    • Compensation: US$234.15k
  • Karen Martin

    Director

    • Tenure: 0.3yrs
  • David Morris (64yo)

    Independent Director

    • Tenure: 3.2yrs
    • Compensation: US$180.14k

Company Information

ECN Capital Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ECN Capital Corp.
  • Ticker: ECN
  • Exchange: TSX
  • Founded: 2016
  • Industry: Specialized Finance
  • Sector: Diversified Financials
  • Market Cap: CA$1.140b
  • Shares outstanding: 240.50m
  • Website: https://www.ecncapitalcorp.com

Number of Employees


Location

  • ECN Capital Corp.
  • 181 Bay Street
  • Suite 2830
  • Toronto
  • Ontario
  • M5J 2T3
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ECNTSX (The Toronto Stock Exchange)YesCommon SharesCACADSep 2016
ECNC.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDSep 2016
2EZDB (Deutsche Boerse AG)YesCommon SharesDEEURSep 2016
ECN.PRCTSX (The Toronto Stock Exchange)PFD CUM SER CCACADMay 2017

Biography

ECN Capital Corp. originates, manages, and advises on prime consumer credit portfolios primarily in the United States. The company operates through Service Finance - Unsecured Consumer Loans; Triad - Secur ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 00:58
End of Day Share Price2019/12/10 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.