TSX:ECN

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

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


Snowflake Analysis

High growth potential and fair value.


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

5.5%

ECN

12.4%

CA Diversified Financial

0.07%

CA Market


1 Year Return

29.6%

ECN

17.3%

CA Diversified Financial

-3.6%

CA Market

Return vs Industry: ECN exceeded the Canadian Diversified Financial industry which returned 18.7% over the past year.

Return vs Market: ECN exceeded the Canadian Market which returned -4% over the past year.


Shareholder returns

ECNIndustryMarket
7 Day5.5%12.4%0.07%
30 Day7.4%17.9%2.1%
90 Day20.0%28.8%1.8%
1 Year32.6%29.6%19.6%17.3%-0.09%-3.6%
3 Year36.6%29.9%28.2%18.0%3.7%-6.1%
5 Yearn/a6.3%-24.0%31.1%11.6%

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?

37.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ECN (CA$5.52) is trading below our estimate of fair value (CA$8.81)

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


Price To Earnings Ratio

PE vs Industry: ECN is poor value based on its PE Ratio (45.1x) compared to the CA Diversified Financial industry average (44x).

PE vs Market: ECN is poor value based on its PE Ratio (45.1x) compared to the Canadian market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: ECN is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: ECN is overvalued based on its PB Ratio (1.5x) compared to the CA Diversified Financial industry average (0.9x).


Next Steps

Future Growth

How is ECN Capital forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

68.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ECN's forecast earnings growth (68.5% per year) is above the savings rate (1.7%).

Earnings vs Market: ECN's earnings (68.5% per year) are forecast to grow faster than the Canadian market (22.7% per year).

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

Revenue vs Market: ECN's revenue (23.7% per year) is forecast to grow faster than the Canadian market (5.8% per year).

High Growth Revenue: ECN's revenue (23.7% 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 ECN's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has ECN Capital performed over the past 5 years?

-47.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ECN has a large one-off loss of $13.0M impacting its June 30 2020 financial results.

Growing Profit Margin: ECN became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: ECN's earnings have declined by 47% per year over the past 5 years.

Accelerating Growth: ECN has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ECN has become profitable in the last year, making it difficult to compare its past year earnings growth to the Diversified Financial industry (5.8%).


Return on Equity

High ROE: ECN's Return on Equity (3.8%) is considered low.


Next Steps

Financial Health

How is ECN Capital's financial position?


Financial Position Analysis

Short Term Liabilities: ECN's short term assets ($819.1M) exceed its short term liabilities ($186.1M).

Long Term Liabilities: ECN's short term assets ($819.1M) do not cover its long term liabilities ($860.7M).


Debt to Equity History and Analysis

Debt Level: ECN's debt to equity ratio (82.4%) is considered high.

Reducing Debt: ECN's debt to equity ratio has reduced from 294% to 82.4% over the past 5 years.

Debt Coverage: ECN's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if ECN's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

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

1.78%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ECN's dividend (1.78%) is higher than the bottom 25% of dividend payers in the Canadian market (1.68%).

High Dividend: ECN's dividend (1.78%) is low compared to the top 25% of dividend payers in the Canadian market (5.83%).


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 4 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (77%), ECN's payments are 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

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

2.8yrs

Average management tenure


CEO

Steve Hudson (61 yo)

4yrs

Tenure

US$5,741,875

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 ($USD5.74M) is above average for companies of similar size in the Canadian market ($USD1.31M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Steven Hudson
CEO & Director4yrsUS$5.74m5.27%
$ 70.6m
Michael Lepore
Chief Financial Officer1.58yrsUS$2.26m0.23%
$ 3.1m
Mark Berch
President of Service Finance3.08yrsUS$3.09mno data
Scott Shaw
Chief Executive Officer of The Kessler Group1.58yrsUS$4.88m0.21%
$ 2.8m
Randall Lyle Yasny
Chief Investment Officer0.75yrno data0.32%
$ 4.3m
John Wimsatt
Head of Corporate Development & Investor Relations3.75yrsno data0.22%
$ 2.9m
Mary Koenig
Senior VP1.08yrsno data0.23%
$ 3.1m
Steve Grosso
Chief Operating Officer of USno datano datano data
Ian Berch
Chief Operating Officer of Service Finance2.75yrsno datano data
Algis Vaitonis
Chief Credit Officerno datano data0.13%
$ 1.7m
Donald Glisson
Chief Executive Officer of Triad Financial Services2.75yrsno datano data

2.8yrs

Average Tenure

Experienced Management: ECN's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Steven Hudson
CEO & Director4yrsUS$5.74m5.27%
$ 70.6m
Paul Stoyan
Independent Director4yrsUS$167.55k0.25%
$ 3.4m
Carol Goldman
Independent Director3.5yrsUS$189.70k0.012%
$ 165.5k
William Lovatt
Independent Chairman of the Board4yrsUS$802.33k0.29%
$ 3.9m
Pierre Lortie
Independent Director4yrsUS$154.65k0.17%
$ 2.3m
Karen Martin
Independent Director1.17yrsUS$41.56k0.036%
$ 478.3k
David Morris
Independent Director4yrsUS$155.55k0.012%
$ 165.5k

4.0yrs

Average Tenure

62yo

Average Age

Experienced Board: ECN's board of directors are considered experienced (4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: ECN insiders have only sold shares 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

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$1.339b
  • Shares outstanding: 242.63m
  • Website: https://www.ecncapitalcorp.com

Number of Employees


Location

  • ECN Capital Corp.
  • Royal Bank Plaza
  • Suite 1625
  • Toronto
  • Ontario
  • M5J 2J1
  • 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-Home Improvement Loans; KG - Consumer Cre ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/26 00:47
End of Day Share Price2020/10/23 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.