MCAN Mortgage (MKP) AI Stock Analysis

• Market Cap: C$677.66M
• Dividend Yield: 9.31%
• Average Volume (3M): 54.21K
• Price to Earnings (P/E): 8.4
• Beta (1Y): 0.62
• Revenue Growth: 26.81%
• EPS Growth: -6.49%
• Country: CA
• Employees: 160
• Sector: Financial
• Sector Strength: 82
• Industry: Financial - Mortgages
• EPS (TTM): 2.07
• Shares Outstanding: 38,901,215
• 10 Day Avg. Volume: 50,381
• 30 Day Avg. Volume: 54,213
• PEG Ratio: 6.72
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.45
• Price to Cash Flow (P/CF): -5.20
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$20.00
• Price Target Upside: 17.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

MCAN Mortgage scores highly due to its strong financial performance and attractive valuation. The elimination of debt, robust revenue growth, and high dividend yield are key strengths. Positive technical indicators and recent strategic corporate events contribute to a favorable outlook, though concerns about cash flow volatility and missing EBIT/EBITDA margins need attention.

Positive Factors

Dividend Yield

MKP shares offer a sustainable 9% yield underpinned by a conservative regular dividend payout and management's focus on maintaining net interest margins.

Financial Performance

MKP is performing well in a soft housing market underpinned by its margin focus, rising market share and operational efficiency.

Negative Factors

Impaired Mortgages

Impaired mortgages tick higher to 246 bps of the corporate mortgage portfolio, mainly related to five construction mortgages.

Stock Rating

Analyst reiterates a Market Perform rating, indicating a balanced risk-reward with the stock’s dividend yield normalizing to its long-term average.

MCAN Mortgage Business Overview & Revenue Model

Company Description

MCAN Mortgage Corporation (MKP) is a Canadian mortgage investment company that operates within the financial services sector. The company focuses on providing a range of mortgage and real estate investment solutions. MCAN Mortgage is involved in originating, underwriting, and investing in residential and commercial mortgages, as well as development and construction loans. Additionally, it engages in securitization activities and manages a portfolio of real estate investments.

How the Company Makes Money

MCAN Mortgage makes money primarily through the interest income generated from its mortgage loans, including residential and commercial mortgages, as well as construction and development loans. The company also earns revenue from its participation in the Canada Mortgage Bonds program and through securitization of insured mortgages, which involves pooling mortgage loans and selling them as securities to investors. Another significant revenue stream is the management of its investment portfolio, which can include revenue from real estate investments. Key partnerships with financial institutions and real estate developers can enhance its earning potential by expanding its lending capabilities and investment opportunities.

MCAN Mortgage Financial Statement Overview

Summary

MCAN Mortgage demonstrates strong financial health with consistent revenue growth and impressive return on equity. The elimination of debt and a robust cash position add to the company's stability. However, volatility in historical cash flows and missing EBIT/EBITDA margins require monitoring.

Income Statement

The income statement shows strong performance with a substantial revenue growth of 43.91% from 2020 to 2024. The net profit margin is solid, indicating effective cost management, while the gross profit margin remains consistent due to the company's business model as a mortgage provider. However, the EBIT and EBITDA margins are unavailable for the latest period, which could impact further analysis.

Balance Sheet

The balance sheet is stable with a strong equity base, as indicated by the equity ratio of 11.2% in 2024. The company has managed to eliminate its debt, moving to a net cash position, further strengthening its financial stability. The return on equity has been impressive, notably increasing over the years, reflecting efficient use of equity to generate profits.

Cash Flow

Cash flow analysis shows a positive trend with a free cash flow growth rate of 181.7% from 2023 to 2024. Operating cash flow has also improved significantly, indicating better cash management. The free cash flow to net income ratio suggests strong cash generation relative to profit, although historical volatility in operating cash flow needs attention.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
127.28M	123.94M	88.43M	96.50M	66.42M
	Gross Profit
127.28M	32.94M	32.99M	55.59M	26.87M
	EBIT
-495.07M	90.36M	132.12M	63.97M	42.65M
	EBITDA
0.00	96.08M	132.12M	63.97M	42.65M
	Net Income Common Stockholders
77.59M	77.50M	55.35M	64.36M	42.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
61.70M	60.34M	78.21M	122.27M	88.93M
	Total Assets
5.35B	4.74B	4.08B	3.81B	2.73B
	Total Debt
0.00	66.38M	8.60M	1.70B	2.77M
	Net Debt
-61.70M	-60.34M	-69.61M	1.57B	-86.16M
	Total Liabilities
4.75B	4.21B	3.59B	3.37B	2.38B
	Stockholders Equity
599.19M	531.84M	489.31M	433.26M	346.51M
Cash Flow		Free Cash Flow
48.97M	-60.26M	27.98M	-113.73M	58.81M
	Operating Cash Flow
53.77M	-59.59M	28.27M	-113.57M	59.12M
	Investing Cash Flow
13.79M	17.19M	18.07M	17.70M	15.22M
	Financing Cash Flow
-66.20M	24.54M	-90.39M	129.22M	-39.87M

MCAN Mortgage Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MKP, the sentiment is Negative. The current price of 16.97 is below the 20-day moving average (MA) of 18.23, below the 50-day MA of 18.17, and below the 200-day MA of 17.38, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 54.52 is Neutral, neither overbought nor oversold. The STOCH value of 29.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MKP.

MCAN Mortgage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MKP	78 Outperform	C$677.66M	8.45	13.72%	9.31%	26.81%	-6.49%
TD	76 Outperform	$139.00B	16.81	7.68%	5.35%	11.78%	-25.44%
CM	75 Outperform	$73.60B	10.13	13.23%	4.87%	10.79%	18.20%
Sector *	64 Neutral	$12.70B	9.08	9.19%	4.89%	16.29%	-8.64%
FN	56 Neutral	C$2.18B	10.93	27.56%	6.79%	16.99%	-19.87%
LB	53 Neutral	$1.11B	―	-0.24%	7.69%	-3.68%	-111.41%

MCAN Mortgage Corporate Events

MCAN Financial Group’s Tree Planting Initiative: A Commitment to Sustainability

MCAN Financial Group has successfully planted over 25,000 trees across Canada in partnership with One Tree Planted, reflecting its commitment to sustainability and environmental impact. This initiative, which plants four trees for every mortgage financed, aims to address reforestation needs in Canada and underscores MCAN’s dedication to environmental stewardship and fostering a values-driven corporate culture.

MCAN Mortgage Appoints Derek Sutherland as President and CEO

MCAN Mortgage Corporation has appointed Derek Sutherland as its new President and CEO, effective April 1, 2025. Sutherland, who has been with the company in various leadership roles since 2017, including Interim CEO and Chair of the Board, is expected to lead MCAN with a focus on sustainable growth and shareholder returns. His appointment is seen as a strategic move to leverage his extensive experience in finance, risk management, and governance to strengthen MCAN’s market position and operational success.

MCAN Financial Group Reports Solid 2024 Results and Increases Dividend

MCAN Financial Group reported a slight increase in net income for 2024, driven by higher income from MCAP and improved securitized mortgage spread income, despite facing challenges such as higher operating expenses and unrealized fair value losses. The company declared a 5% increase in its regular cash dividend, reflecting confidence in its strategic positioning in the Canadian residential mortgage market. Despite a challenging interest rate environment, MCAN maintained strong origination and renewal volumes, and its investment in MCAP remains a key success driver.