ECN CAPITAL CORP (ECN.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:ECN - CA26829L1076 - Common Stock
3.05 CAD
+0.01 (+0.33%)
ECN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 28 industry peers in the Financial Services industry. While ECN seems to be doing ok healthwise, there are quite some concerns on its profitability. ECN scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
- In the past year ECN was profitable.
- ECN had a positive operating cash flow in the past year.
- In multiple years ECN reported negative net income over the last 5 years.
- The reported operating cash flow has been mixed in the past 5 years: ECN reported negative operating cash flow in multiple years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 0.46%, ECN is doing worse than 60.71% of the companies in the same industry.
- The Return On Equity of ECN (2.13%) is worse than 64.29% of its industry peers.
- With a Return On Invested Capital value of 4.52%, ECN perfoms like the industry average, outperforming 53.57% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for ECN is significantly below the industry average of 7.80%.
- The 3 year average ROIC (2.48%) for ECN is below the current ROIC(4.52%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.46% | ||
| ROE | 2.13% | ||
| ROIC | 4.52% |
ROA(3y)-2.68%
ROA(5y)14.79%
ROE(3y)-16.1%
ROE(5y)77.16%
ROIC(3y)2.48%
ROIC(5y)1.63%
1.3 Margins
- ECN has a worse Profit Margin (1.81%) than 67.86% of its industry peers.
- ECN has a Operating Margin of 34.57%. This is comparable to the rest of the industry: ECN outperforms 42.86% of its industry peers.
- In the last couple of years the Operating Margin of ECN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.57% | ||
| PM (TTM) | 1.81% | ||
| GM | N/A |
OM growth 3Y87.71%
OM growth 5Y15.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- ECN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- ECN has more shares outstanding than it did 1 year ago.
- ECN has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for ECN has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.14, we must say that ECN is in the distress zone and has some risk of bankruptcy.
- ECN's Altman-Z score of 0.14 is on the low side compared to the rest of the industry. ECN is outperformed by 82.14% of its industry peers.
- ECN has a debt to FCF ratio of 8.94. This is a slightly negative value and a sign of low solvency as ECN would need 8.94 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 8.94, ECN belongs to the top of the industry, outperforming 82.14% of the companies in the same industry.
- A Debt/Equity ratio of 2.80 is on the high side and indicates that ECN has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 2.80, ECN is doing worse than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.8 | ||
| Debt/FCF | 8.94 | ||
| Altman-Z | 0.14 |
ROIC/WACC0.69
WACC6.55%
2.3 Liquidity
- ECN has a Current Ratio of 1.12. This is a normal value and indicates that ECN is financially healthy and should not expect problems in meeting its short term obligations.
- ECN's Current ratio of 1.12 is fine compared to the rest of the industry. ECN outperforms 60.71% of its industry peers.
- A Quick Ratio of 1.12 indicates that ECN should not have too much problems paying its short term obligations.
- ECN's Quick ratio of 1.12 is fine compared to the rest of the industry. ECN outperforms 64.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
- ECN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 650.00%, which is quite impressive.
- ECN shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -20.31% yearly.
- The Revenue has grown by 23.61% in the past year. This is a very strong growth!
- ECN shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.56% yearly.
EPS 1Y (TTM)650%
EPS 3Y-34.48%
EPS 5Y-20.31%
EPS Q2Q%50%
Revenue 1Y (TTM)23.61%
Revenue growth 3Y21.98%
Revenue growth 5Y-1.56%
Sales Q2Q%12.47%
3.2 Future
- Based on estimates for the next years, ECN will show a very strong growth in Earnings Per Share. The EPS will grow by 48.19% on average per year.
- ECN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.01% yearly.
EPS Next Y102%
EPS Next 2Y65.25%
EPS Next 3Y48.19%
EPS Next 5YN/A
Revenue Next Year14.38%
Revenue Next 2Y15.2%
Revenue Next 3Y14.01%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 14.52 indicates a correct valuation of ECN.
- ECN's Price/Earnings ratio is a bit cheaper when compared to the industry. ECN is cheaper than 67.86% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.21. ECN is valued slightly cheaper when compared to this.
- With a Price/Forward Earnings ratio of 9.02, the valuation of ECN can be described as very reasonable.
- Based on the Price/Forward Earnings ratio, ECN is valued cheaply inside the industry as 85.71% of the companies are valued more expensively.
- ECN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.52 | ||
| Fwd PE | 9.02 |
4.2 Price Multiples
- ECN's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ECN is cheaper than 92.86% of the companies in the same industry.
- ECN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ECN is cheaper than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.48 | ||
| EV/EBITDA | 11.31 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- A more expensive valuation may be justified as ECN's earnings are expected to grow with 48.19% in the coming years.
PEG (NY)0.14
PEG (5Y)N/A
EPS Next 2Y65.25%
EPS Next 3Y48.19%
5. Dividend
5.1 Amount
- ECN has a Yearly Dividend Yield of 1.32%. Purely for dividend investing, there may be better candidates out there.
- With a Dividend Yield of 1.32, ECN pays less dividend than the industry average, which is at 5.64. 82.14% of the companies listed in the same industry pay a better dividend than ECN!
- Compared to the average S&P500 Dividend Yield of 1.81, ECN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.32% |
5.2 History
- The dividend of ECN decreases each year by -5.51%.
- ECN has been paying a dividend for at least 10 years, so it has a reliable track record.
- The dividend of ECN decreased in the last 3 years.
Dividend Growth(5Y)-5.51%
Div Incr Years0
Div Non Decr Years2
5.3 Sustainability
- ECN pays out 348.97% of its income as dividend. This is not a sustainable payout ratio.
DP348.97%
EPS Next 2Y65.25%
EPS Next 3Y48.19%
ECN CAPITAL CORP / ECN.CA FAQ
What is the ChartMill fundamental rating of ECN CAPITAL CORP (ECN.CA) stock?
ChartMill assigns a fundamental rating of 5 / 10 to ECN.CA.
What is the valuation status for ECN stock?
ChartMill assigns a valuation rating of 8 / 10 to ECN CAPITAL CORP (ECN.CA). This can be considered as Undervalued.
What is the profitability of ECN stock?
ECN CAPITAL CORP (ECN.CA) has a profitability rating of 3 / 10.
What are the PE and PB ratios of ECN CAPITAL CORP (ECN.CA) stock?
The Price/Earnings (PE) ratio for ECN CAPITAL CORP (ECN.CA) is 14.52 and the Price/Book (PB) ratio is 2.96.
Can you provide the dividend sustainability for ECN stock?
The dividend rating of ECN CAPITAL CORP (ECN.CA) is 2 / 10 and the dividend payout ratio is 348.97%.