Tricon Residential Inc (TCN.CA) Stock Fundamental Analysis
TSX:TCN - Toronto Stock Exchange - CA89612W1023 - Common Stock - Currency: CAD
We assign a fundamental rating of 4 out of 10 to TCN. TCN was compared to 28 industry peers in the Real Estate Management & Development industry. There are concerns on the financial health of TCN while its profitability can be described as average. TCN is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year TCN was profitable.
TCN had a positive operating cash flow in the past year.
Each year in the past 5 years TCN has been profitable.
TCN had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.86%, TCN is in the better half of the industry, outperforming 70.59% of the companies in the same industry.
TCN has a Return On Equity of 2.96%. This is in the better half of the industry: TCN outperforms 73.53% of its industry peers.
The Return On Invested Capital of TCN (1.64%) is worse than 67.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.86% | ||
| ROE | 2.96% | ||
| ROIC | 1.64% |
ROA(3y)4.08%
ROA(5y)3.73%
ROE(3y)12.96%
ROE(5y)10.43%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
TCN has a Profit Margin of 13.44%. This is amongst the best in the industry. TCN outperforms 85.29% of its industry peers.
TCN's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 29.82%, TCN is in the better half of the industry, outperforming 67.65% of the companies in the same industry.
In the last couple of years the Operating Margin of TCN has declined.
Looking at the Gross Margin, with a value of 69.17%, TCN belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.
In the last couple of years the Gross Margin of TCN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.82% | ||
| PM (TTM) | 13.44% | ||
| GM | 69.17% |
OM growth 3Y-5.22%
OM growth 5YN/A
PM growth 3Y-21.94%
PM growth 5Y-54.81%
GM growth 3Y-0.28%
GM growth 5YN/A
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TCN is destroying value.
TCN has about the same amout of shares outstanding than it did 1 year ago.
TCN has more shares outstanding than it did 5 years ago.
The debt/assets ratio for TCN has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.49, we must say that TCN is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of TCN (0.49) is worse than 79.41% of its industry peers.
The Debt to FCF ratio of TCN is 65.95, which is on the high side as it means it would take TCN, 65.95 years of fcf income to pay off all of its debts.
TCN has a better Debt to FCF ratio (65.95) than 64.71% of its industry peers.
A Debt/Equity ratio of 1.48 is on the high side and indicates that TCN has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.48, TCN is doing worse than 61.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.48 | ||
| Debt/FCF | 65.95 | ||
| Altman-Z | 0.49 |
ROIC/WACC0.22
WACC7.57%
2.3 Liquidity
A Current Ratio of 0.49 indicates that TCN may have some problems paying its short term obligations.
TCN has a worse Current ratio (0.49) than 61.76% of its industry peers.
TCN has a Quick Ratio of 0.49. This is a bad value and indicates that TCN is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of TCN (0.49) is worse than 61.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
TCN shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -66.47%.
The earnings per share for TCN have been decreasing by -17.03% on average. This is quite bad
The Revenue has been growing slightly by 5.48% in the past year.
The Revenue has been growing by 94.79% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-66.47%
EPS 3Y4.46%
EPS 5Y-17.03%
EPS Q2Q%36.36%
Revenue 1Y (TTM)5.48%
Revenue growth 3Y28.44%
Revenue growth 5Y94.79%
Sales Q2Q%15.69%
3.2 Future
Based on estimates for the next years, TCN will show a very negative growth in Earnings Per Share. The EPS will decrease by -15.81% on average per year.
TCN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.50% yearly.
EPS Next Y-48.61%
EPS Next 2Y-15.81%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year6.66%
Revenue Next 2Y8.5%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.67, which indicates a rather expensive current valuation of TCN.
Based on the Price/Earnings ratio, TCN is valued a bit cheaper than 79.41% of the companies in the same industry.
TCN's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.88.
Based on the Price/Forward Earnings ratio of 38.28, the valuation of TCN can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TCN indicates a somewhat cheap valuation: TCN is cheaper than 70.59% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.20. TCN is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.67 | ||
| Fwd PE | 38.28 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as TCN.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TCN indicates a somewhat cheap valuation: TCN is cheaper than 73.53% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.33 | ||
| EV/EBITDA | 33.91 |
4.3 Compensation for Growth
A cheap valuation may be justified as TCN's earnings are expected to decrease with -15.81% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-15.81%
EPS Next 3YN/A
5. Dividend
5.1 Amount
TCN has a Yearly Dividend Yield of 1.99%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.42, TCN pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.45, TCN has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
5.2 History
On average, the dividend of TCN grows each year by 19.89%, which is quite nice.
TCN has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)19.89%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
TCN pays out 84.00% of its income as dividend. This is not a sustainable payout ratio.
TCN's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP84%
EPS Next 2Y-15.81%
EPS Next 3YN/A
TSX:TCN (5/2/2024, 7:00:00 PM)
15.34
-0.12 (-0.78%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryReal Estate Management & Development
Earnings (Last)
Earnings (Next)
Inst Owners36.51%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap4.55B
Analysts71.11
Price Target12.26 (-20.08%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
Yearly Dividend0.35
Dividend Growth(5Y)19.89%
DP84%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)172.28%
Min EPS beat(2)147.53%
Max EPS beat(2)197.03%
EPS beat(4)3
Avg EPS beat(4)110.4%
Min EPS beat(4)-0.99%
Max EPS beat(4)197.03%
EPS beat(8)7
Avg EPS beat(8)235.95%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)85.19%
Min Revenue beat(2)79.44%
Max Revenue beat(2)90.95%
Revenue beat(4)4
Avg Revenue beat(4)80.48%
Min Revenue beat(4)72.02%
Max Revenue beat(4)90.95%
Revenue beat(8)8
Avg Revenue beat(8)71.53%
Revenue beat(12)11
Avg Revenue beat(12)50.84%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-5.26%
PT rev (3m)4.25%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.67 | ||
| Fwd PE | 38.28 | ||
| P/S | 3.92 | ||
| P/FCF | 36.33 | ||
| P/OCF | 24.11 | ||
| P/B | 0.86 | ||
| P/tB | 0.87 | ||
| EV/EBITDA | 33.91 |
EPS(TTM)0.78
EY5.08%
EPS(NY)0.4
Fwd EY2.61%
FCF(TTM)0.42
FCFY2.75%
OCF(TTM)0.64
OCFY4.15%
SpS3.92
BVpS17.81
TBVpS17.65
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.86% | ||
| ROE | 2.96% | ||
| ROCE | 2% | ||
| ROIC | 1.64% | ||
| ROICexc | 1.67% | ||
| ROICexgc | 1.67% | ||
| OM | 29.82% | ||
| PM (TTM) | 13.44% | ||
| GM | 69.17% | ||
| FCFM | 10.78% |
ROA(3y)4.08%
ROA(5y)3.73%
ROE(3y)12.96%
ROE(5y)10.43%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-1.7%
ROICexcg growth 5YN/A
ROICexc growth 3Y-1.2%
ROICexc growth 5YN/A
OM growth 3Y-5.22%
OM growth 5YN/A
PM growth 3Y-21.94%
PM growth 5Y-54.81%
GM growth 3Y-0.28%
GM growth 5YN/A
F-Score5
Asset Turnover0.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.48 | ||
| Debt/FCF | 65.95 | ||
| Debt/EBITDA | 21.13 | ||
| Cap/Depr | 261.04% | ||
| Cap/Sales | 5.47% | ||
| Interest Coverage | 0.87 | ||
| Cash Conversion | 50.9% | ||
| Profit Quality | 80.17% | ||
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.49 | ||
| Altman-Z | 0.49 |
F-Score5
WACC7.57%
ROIC/WACC0.22
Cap/Depr(3y)254.57%
Cap/Depr(5y)208.56%
Cap/Sales(3y)5.52%
Cap/Sales(5y)8.97%
Profit Quality(3y)42.83%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-66.47%
EPS 3Y4.46%
EPS 5Y-17.03%
EPS Q2Q%36.36%
EPS Next Y-48.61%
EPS Next 2Y-15.81%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)5.48%
Revenue growth 3Y28.44%
Revenue growth 5Y94.79%
Sales Q2Q%15.69%
Revenue Next Year6.66%
Revenue Next 2Y8.5%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y152.14%
EBIT growth 3Y21.74%
EBIT growth 5YN/A
EBIT Next Year27.82%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-60.91%
FCF growth 3Y-11.02%
FCF growth 5YN/A
OCF growth 1Y-48.93%
OCF growth 3Y-1.17%
OCF growth 5YN/A