Dividend Stock Analysis: Home Capital Group Inc. (TSE: HCG)
I couldn't decide what stock to analyze this week, so I decided to chose another random Dividend Achiever, so please enjoy this weeks analysis on Home Capital Group Inc.
About the company:
Here is Home Capital Group's description of what they do, which can be found on their website here
What the professionals think:
| Source | Value | Score |
|---|---|---|
| Is it a Dividend Aristocrat: | Yes | 0.5 |
| Is it a Dividend Achiever: | Yes | 0.5 |
| Globe Investor Rating: | 3 Stars | 0 |
Score: 1.0/1.5
Dividend performance:
Dividend Information acquired at DividendInvenstors.ca
| Measurement | Value | Measurement | Value |
|---|---|---|---|
| Dividend Rate: | $0.52 | Quarterly Dividend Rate: | $0.13 |
| Current Dividend Yield: | 1.50% | 5 yr. Avg. Dividend Yield: | 0.60% |
| 3 yr. Dividend Growth: | 49.34% | 5 yr. Dividend Growth: | 50.45% |
| Payout Ratio: | 16.00% | 5 yr. Historic Payout Ratio: | 11.0% |
| Measurement | Value | Score |
|---|---|---|
| Is current Yield > Avg Yield: | Yes | 1 |
| > 10% dividend growth per year: | Yes | 1 |
| > 5 yrs of dividend growth: | Yes | 1 |
| payout ratio <= historic payout ratio: | No | 0 |
Score: 3.0/4.0
Fundamentals:
All fundamentals based on 2007 annual report, and the latest market close share price of $34.25
| Measurement | Value | Score |
|---|---|---|
| Earnings per share (EPS): | 2.61 | - |
| Is EPS growing: | Yes | 0.5 |
| Net Profit Margin: | 47.9% | - |
| Is Net Profit Margin growing: | Yes | 0.5 |
| Price/Book Ratio (P/B) < 0.80: | 3.40 | 0 |
| Price/Earnings Ratio (P/E) < 15: | 13.12 | 0.5 |
| Price/Sales Ratio (P/S) < 1.5: | 6.27 | 0 |
| Is the Graham Number > stock price: | $24.32 | 0 |
Score: 1.5/3.5
Technicals:
Chart Acquired at StockCharts.com
| Measurement | Value | Score |
|---|---|---|
| 200 day Simple Moving Average direction: | Down | 0 |
| Indicators show a good time to buy (MACD, SSTOCH, RSI): | No | 0 |
Score: 0/1.0
Total Score: 5.5/10
Notes:
- Although they lost a point for having the current payout ratio greater then the average payout ration, I still like the looks of the current low payout ratio of 16%
Summary:
I wasn't too impressed with Home Capital Groups performance in this analysis. Based on what I have seen I wouldn't recommend buying them as a solid dividend based pick. Although they have had very good dividend increases, they are not currently selling at a discount based on what their revenue stream is. If the price were to drop a bit further, then I might consider looking into them again. But for now, I am going to stick with a Don't Buy rating.
Recommendation:Don't Buy
Full Disclosure: I currently do not own shares in Home Capital Group Inc. (TSE: HCG )
Disclaimer: Any information contained in the above article represents my opinions only, and should not be construed as personalized investment advice. I cannot assess, verify or guarantee the suitability of any particular investment to any particular situation and the reader of the article bears complete responsibility for its own investment research and should seek the advice of a qualified investment professional that provides individualized advice prior to making any investment decisions. All opinions expressed and information and data provided therein are subject to change without notice.
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Thanks for the Comment DA!
If you have any stock recommendations that you would like me to do an analysis on, feel free to send me an email through our contact form, or just let know of the stock in the comments!
HCG
Good thorough analysis Bullish!! I appreciate the insight on a stock I've never even examined before
DA.