MCAN Mortgage (MKP) AI Stock Analysis

• Market Cap: C$850.65M
• Dividend Yield: 7.13%
• Average Volume (3M): 55.88K
• Price to Earnings (P/E): 11.5
• Beta (1Y): 0.78
• Revenue Growth: 7.74%
• EPS Growth: -31.96%
• Country: CA
• Employees: 160
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): 0.52
• Shares Outstanding: 40,162,807
• 10 Day Avg. Volume: 57,358
• 30 Day Avg. Volume: 55,882
• PEG Ratio: -1.23
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 2.30
• P/FCF Ratio: 14.02
• 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$21.00
• Price Target Upside: -8.74% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: C$25.00 ▲(8.65% Upside)

MCAN Mortgage's strong technical indicators and attractive dividend yield are significant strengths, supporting a positive outlook. The company's robust financial performance, despite cash flow challenges, and positive corporate events further bolster the score. However, caution is advised due to the approaching overbought technical conditions.

Positive Factors

Revenue Growth

Strong revenue growth indicates successful market penetration and demand for MCAN's mortgage products, supporting long-term business expansion.

Balance Sheet Health

A low debt-to-equity ratio reflects prudent financial management, ensuring stability and flexibility to withstand economic fluctuations.

Profitability

High profit margins demonstrate efficient operations and strong pricing power, which are key to sustaining long-term profitability.

Negative Factors

Cash Flow Management

Negative cash flows can hinder the company's ability to invest in growth opportunities and meet financial obligations, impacting long-term viability.

Declining ROE

A declining ROE may signal reduced efficiency in generating profits from shareholders' equity, potentially affecting investor confidence.

Operational Efficiency

Decreasing margins indicate potential inefficiencies or increased costs, which could erode profitability if not addressed.

MCAN Mortgage Business Overview & Revenue Model

Company Description

MCAN Mortgage Corporation operates as a loan and mortgage investment corporation in Canada. The company offers single-family residential mortgages, as well as residential construction, non-residential construction, and commercial loans, as well as engages in the real estate investments trusts and private investment activities. It also provides term deposits through a network of independent financial agents. The company was formerly known as MCAP Inc. and changed its name to MCAN Mortgage Corporation in September 2006. MCAN Mortgage Corporation was founded in 1980 and is headquartered in Toronto, Canada.

How the Company Makes Money

MCAN Mortgage generates revenue primarily through interest income earned on the mortgages it originates and manages. The company earns interest from both its residential and commercial mortgage portfolios, which are funded through a combination of equity and debt financing. Additionally, MCAN may generate fee income from mortgage origination and servicing fees. Significant partnerships with financial institutions and other mortgage providers enhance its lending capabilities and market reach, contributing to its revenue streams. The company's focus on risk-adjusted returns and diversification of its mortgage holdings further supports its profitability.

MCAN Mortgage Financial Statement Overview

Summary

MCAN Mortgage shows robust revenue growth and profitability, supported by a strong balance sheet with low leverage. However, the company faces challenges in cash flow management, with negative operating and free cash flows that could impact its financial flexibility.

Income Statement

MCAN Mortgage has demonstrated strong revenue growth with a 22.83% increase in the TTM period, indicating a positive trajectory. The gross profit margin stands at 45.75%, and the net profit margin is 34.72%, both reflecting solid profitability. However, the decline in EBIT and EBITDA margins compared to previous periods suggests some pressure on operational efficiency.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.19, indicating conservative leverage and financial stability. The return on equity is 11.76%, which is decent but has decreased from previous years. The equity ratio is healthy, suggesting a strong capital structure, but the declining ROE could be a concern if the trend continues.

Cash Flow

MCAN Mortgage's cash flow situation is challenging, with negative operating and free cash flows in the TTM period. The free cash flow growth rate is high at 310.12%, but this is due to a recovery from a low base. The free cash flow to net income ratio is strong at 1.25, indicating good cash conversion, but the negative cash flows pose a risk to liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	264.56M	298.26M	245.88M	165.48M	152.87M	121.78M
Gross Profit	129.94M	127.28M	123.13M	88.43M	96.50M	70.39M
EBITDA	70.33M	76.55M	78.23M	55.07M	63.97M	42.65M
Net Income	71.39M	77.59M	77.50M	55.35M	64.36M	42.89M
Balance Sheet
Total Assets	5.74B	5.35B	4.74B	4.08B	3.81B	2.73B
Cash, Cash Equivalents and Short-Term Investments	134.52M	61.70M	60.34M	78.21M	122.27M	88.93M
Total Debt	2.71B	6.17M	66.38M	8.60M	100.97M	2.77M
Total Liabilities	5.12B	4.75B	4.21B	3.59B	3.37B	2.38B
Stockholders Equity	620.89M	599.19M	531.84M	489.31M	433.26M	346.51M
Cash Flow
Free Cash Flow	-157.16M	48.97M	-60.26M	27.98M	-113.73M	58.81M
Operating Cash Flow	-150.96M	53.77M	-59.59M	28.27M	-113.57M	59.12M
Investing Cash Flow	12.56M	13.79M	17.19M	18.07M	17.70M	15.22M
Financing Cash Flow	212.75M	-66.20M	24.54M	-90.39M	129.22M	-39.87M

MCAN Mortgage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 23.01
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 23.01 is above the 20-day moving average (MA) of 22.12, above the 50-day MA of 21.68, and above the 200-day MA of 19.84, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 68.33 is Neutral, neither overbought nor oversold. The STOCH value of 84.43 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
MKP	76 Outperform	C$850.65M	11.48	10.50%	7.13%	7.74%	-31.96%
AI	68 Neutral	C$526.75M	10.44	9.72%	8.06%	-13.69%	-1.60%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
FC	67 Neutral	C$430.92M	11.34	8.90%	8.49%	-6.64%	4.43%
VBNK	63 Neutral	$640.14M	22.03	6.08%	0.50%	3.31%	-39.12%
TF	62 Neutral	C$551.96M	14.62	5.52%	10.13%	-9.00%	-35.22%
DLCG	50 Neutral	C$822.72M	-4.48	-137.87%	1.53%	36.52%	-1243.96%

MCAN Mortgage Corporate Events

MCAN Financial Group Reports Q3 Growth Amid Economic Uncertainty

MCAN Financial Group reported a 2% increase in net income for the third quarter of 2025, driven by higher income from its investment in MCAP and the successful launch of a new uninsured residential mortgage securitization program. Despite an uncertain economic outlook leading to higher provisions for credit losses, the company maintained resilient credit quality. The company’s total residential mortgage assets grew by 10% year-to-date, with significant increases in both uninsured and insured mortgage originations. MCAP continues to be a key driver of returns, contributing significantly to the company’s income through higher securitization income.