MCAN Mortgage (MKP) AI Stock Analysis

• Market Cap: C$843.37M
• Dividend Yield: 7.51%
• Average Volume (3M): 41.76K
• Price to Earnings (P/E): 11.5
• Beta (1Y): 0.70
• Revenue Growth: 12.10%
• EPS Growth: -18.24%
• Country: CA
• Employees: 160
• Sector: Financial
• Sector Strength: 71
• Industry: Financial - Mortgages
• EPS (TTM): 0.51
• Shares Outstanding: 39,650,590
• 10 Day Avg. Volume: 44,946
• 30 Day Avg. Volume: 41,763
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• 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$23.00
• Price Target Upside: 8.13% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 72 Outperform
• Price Target: C$23.50 ▲(10.48% Upside)

MCAN Mortgage's overall score is driven by strong financial performance and attractive valuation, supported by positive corporate events. However, technical indicators suggest caution due to overbought conditions, and cash flow challenges need addressing.

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.

Market Position

MKP stock may prove an interesting investment option for yield-oriented investors seeking a lower beta Financials idea.

Operational Performance

MKP's core operating performance continues to demonstrate margin focus and impressive loan growth amid a challenged housing market.

Negative Factors

Earnings Performance

Q1/25 results were below expectations, with EPS of $0.43 compared to a consensus of $0.52.

Loan Quality

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

MCAN Mortgage Business Overview & Revenue Model

Company Description

MCAN Mortgage Corporation (MKP) is a Canadian financial institution primarily engaged in the real estate sector through the provision of residential and commercial mortgage products. The company's core services include originating, underwriting, and servicing mortgage loans. MCAN also invests in a diverse portfolio of real estate investments, including residential construction and commercial projects, aiming to generate stable and consistent returns for its shareholders.

How the Company Makes Money

MCAN Mortgage makes money primarily through the interest income generated from its mortgage loan portfolio. The company originates both residential and commercial mortgages, collecting interest from borrowers over the life of the loans. Additionally, MCAN invests in a range of real estate-related assets and securities, which contribute to its earnings through dividends, interest, and capital appreciation. The company also engages in securitization activities, where it bundles mortgages into securities and sells them to investors, earning fees and potentially retaining interests in the securitized assets. Partnerships with other financial institutions and strategic alliances also play a role in enhancing MCAN's revenue streams and market reach.

MCAN Mortgage Financial Statement Overview

Summary

MCAN Mortgage exhibits strong revenue growth and profitability with efficient operational margins. However, cash flow challenges, such as negative free cash flow, indicate potential liquidity issues. Improved debt management and stable returns on equity are positive, but cash flow management needs attention.

Income Statement

MCAN Mortgage has shown robust revenue growth with a significant increase of 60.3% from 2024 to TTM (Trailing-Twelve-Months). The gross profit margin for TTM is 45.7%, indicating strong profitability. However, the net profit margin decreased compared to 2024, standing at 34.7% in TTM, which reflects a modest decline in net income efficiency. EBIT and EBITDA margins remain solid at 36.0% and 41.5% respectively, showcasing operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved significantly to 0.19 in TTM, reflecting better leverage management. Return on Equity (ROE) is healthy at 11.7%, indicating effective utilization of equity. The equity ratio stands at 11.2%, suggesting a stable equity position, though there's room for strengthening equity relative to total assets.

Cash Flow

There was a noticeable decline in free cash flow, moving to negative territory in TTM. The operating cash flow to net income ratio has also turned negative, which raises concerns about cash generation capability relative to net income. The free cash flow to net income ratio is negative, highlighting challenges in converting income into free cash flow, although financing cash flow is positive, indicating some financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	204.39M	127.28M	123.94M	88.43M	96.50M	66.42M
Gross Profit	93.50M	127.28M	32.94M	32.99M	55.59M	26.87M
EBITDA	84.77M	104.94M	96.08M	132.12M	63.97M	42.65M
Net Income	70.96M	77.59M	77.50M	55.35M	64.36M	42.89M
Balance Sheet
Total Assets	5.44B	5.35B	4.74B	4.08B	3.81B	2.73B
Cash, Cash Equivalents and Short-Term Investments	113.56M	61.70M	60.34M	78.21M	122.27M	88.93M
Total Debt	113.93M	6.17M	66.38M	8.60M	1.70B	2.77M
Total Liabilities	4.84B	4.75B	4.21B	3.59B	3.37B	2.38B
Stockholders Equity	607.37M	599.19M	531.84M	489.31M	433.26M	346.51M
Cash Flow
Free Cash Flow	-38.32M	48.97M	-60.26M	27.98M	-113.73M	58.81M
Operating Cash Flow	-30.66M	53.77M	-59.59M	28.27M	-113.57M	59.12M
Investing Cash Flow	12.59M	13.79M	17.19M	18.07M	17.70M	15.22M
Financing Cash Flow	53.34M	21.92M	24.54M	-90.39M	129.22M	-39.87M

MCAN Mortgage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MKP, the sentiment is Positive. The current price of 21.27 is above the 20-day moving average (MA) of 20.41, above the 50-day MA of 19.73, and above the 200-day MA of 18.37, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 77.55 is Negative, neither overbought nor oversold. The STOCH value of 88.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MKP.

MCAN Mortgage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VBNK	74 Outperform	C$465.34M	12.90	6.79%	0.72%	7.83%	-37.41%
MKP	72 Outperform	C$843.37M	11.53	11.84%	7.51%	12.10%	-18.24%
AI	68 Neutral	C$561.05M	11.12	9.72%	7.81%	-11.04%	0.44%
Sector *	68 Neutral	$17.46B	11.65	10.44%	3.86%	10.36%	1.15%
FC	67 Neutral	C$439.00M	11.55	9.14%	8.54%	-0.92%	4.84%
TF	66 Neutral	C$632.23M	14.54	6.30%	9.00%	-10.69%	-28.58%
DLCG	60 Neutral	C$686.66M	37.65	-143.13%	1.49%	35.22%	-1246.65%

MCAN Mortgage Corporate Events

MCAN Financial Group Renews $75 Million ATM Equity Program

MCAN Financial Group has renewed its at-the-market (ATM) equity program, allowing the company to issue up to $75 million in common shares to the public. The program, which has been a successful tool for raising capital over the past four years, will support the company’s growth in its mortgage lending and investing business. The ATM program offers a low-cost source of capital, and its renewal is expected to further enhance MCAN’s ability to expand its operations and strengthen its market position.

The most recent analyst rating on (TSE:MKP) stock is a Buy with a C$19.00 price target. To see the full list of analyst forecasts on MCAN Mortgage stock, see the TSE:MKP Stock Forecast page.

MCAN Financial Group Reports Q2 2025 Results and Declares Dividend

MCAN Financial Group reported a net income of $20.2 million for Q2 2025, showing a slight increase from the previous year. The company’s performance was driven by higher mortgage spread income and increased income from MCAP, despite facing higher provisions for credit losses. MCAN’s total assets reached $5.7 billion, with significant growth in both non-securitized and securitized mortgage portfolios. The company launched a new uninsured residential mortgage securitization program with a major Canadian bank, aiming to enhance its securitization income and grow its uninsured originations. The Board declared a third-quarter cash dividend of $0.41 per share, reflecting MCAN’s strategy of distributing all taxable income to shareholders through dividends.

The most recent analyst rating on (TSE:MKP) stock is a Buy with a C$19.00 price target. To see the full list of analyst forecasts on MCAN Mortgage stock, see the TSE:MKP Stock Forecast page.