Tricon Residential Inc (TCN.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:TCN - CA89612W1023 - Common Stock
15.34 CAD
-0.12 (-0.78%)
Overall TCN gets a fundamental rating of 4 out of 10. We evaluated TCN against 32 industry peers in the Real Estate Management & Development industry. While TCN is still in line with the averages on profitability rating, there are concerns on its financial health. TCN is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- TCN had positive earnings in the past year.
- TCN had a positive operating cash flow in the past year.
- Each year in the past 5 years TCN has been profitable.
- Of the past 5 years TCN 4 years had a positive operating cash flow.
1.2 Ratios
- TCN has a better Return On Assets (0.86%) than 70.59% of its industry peers.
- The Return On Equity of TCN (2.96%) is better than 73.53% of its industry peers.
- TCN has a worse Return On Invested Capital (1.64%) 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 better Profit Margin (13.44%) than 85.29% of its industry peers.
- In the last couple of years the Profit Margin of TCN has declined.
- With a decent Operating Margin value of 29.82%, TCN is doing good in the industry, outperforming 67.65% of the companies in the same industry.
- TCN's Operating Margin has declined in the last couple of years.
- TCN's Gross Margin of 69.17% is amongst the best of the industry. TCN outperforms 88.24% of its industry peers.
- TCN's Gross Margin has been stable in the last couple of years.
| 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TCN is destroying value.
- The number of shares outstanding for TCN remains at a similar level compared to 1 year 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.
- TCN's Altman-Z score of 0.49 is on the low side compared to the rest of the industry. TCN is outperformed by 79.41% of its industry peers.
- TCN has a debt to FCF ratio of 65.95. This is a negative value and a sign of low solvency as TCN would need 65.95 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 65.95, TCN is in the better half of the industry, outperforming 64.71% of the companies in the same industry.
- TCN has a Debt/Equity ratio of 1.48. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of TCN (1.48) is worse than 61.76% of its industry peers.
| 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.
- With a Current ratio value of 0.49, TCN is not doing good in the industry: 61.76% of the companies in the same industry are doing better.
- A Quick Ratio of 0.49 indicates that TCN may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.49, TCN is doing worse than 61.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
- The earnings per share for TCN have decreased strongly by -66.47% in the last year.
- The earnings per share for TCN have been decreasing by -17.03% on average. This is quite bad
- TCN shows a small growth in Revenue. In the last year, the Revenue has grown by 5.48%.
- Measured over the past years, TCN shows a very strong growth in Revenue. The Revenue has been growing by 94.79% on average per year.
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
- The Earnings Per Share is expected to decrease by -15.81% on average over the next years. This is quite bad
- The Revenue is expected to grow by 8.50% on average over the next years. This is quite good.
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 19.67, which indicates a rather expensive current valuation of TCN.
- TCN's Price/Earnings ratio is a bit cheaper when compared to the industry. TCN is cheaper than 79.41% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.60. TCN is valued slightly cheaper when compared to this.
- The Price/Forward Earnings ratio is 38.28, which means the current valuation is very expensive for TCN.
- 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.
- TCN's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.67 | ||
| Fwd PE | 38.28 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TCN is on the same level as its industry peers.
- TCN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TCN is cheaper than 73.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.33 | ||
| EV/EBITDA | 33.91 |
4.3 Compensation for Growth
- TCN's earnings are expected to decrease with -15.81% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-15.81%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.99%, TCN has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.31, TCN pays a bit more dividend than its industry peers.
- TCN's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
5.2 History
- The dividend of TCN is nicely growing with an annual growth rate of 19.89%!
- 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
- 84.00% of the earnings are spent on dividend by TCN. 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
Tricon Residential Inc / TCN.CA FAQ
Can you provide the ChartMill fundamental rating for Tricon Residential Inc?
ChartMill assigns a fundamental rating of 4 / 10 to TCN.CA.
Can you provide the valuation status for Tricon Residential Inc?
ChartMill assigns a valuation rating of 3 / 10 to Tricon Residential Inc (TCN.CA). This can be considered as Overvalued.
Can you provide the profitability details for Tricon Residential Inc?
Tricon Residential Inc (TCN.CA) has a profitability rating of 5 / 10.
What is the financial health of Tricon Residential Inc (TCN.CA) stock?
The financial health rating of Tricon Residential Inc (TCN.CA) is 2 / 10.
What is the earnings growth outlook for Tricon Residential Inc?
The Earnings per Share (EPS) of Tricon Residential Inc (TCN.CA) is expected to decline by -48.61% in the next year.