ECN Capital Corp T.ECN.DB.B

Primary Symbol: T.ECN Alternate Symbol(s): T.ECN.DB | T.ECN.DB.A | T.ECN.PR.C | ECNCF | ECNNF

Financial Services

ECN Capital Corp. is a Canada-based provider of business services to North American banks, credit unions, life insurance companies, pension funds and institutional investors (collectively, its Partners). The Company originates, manages and advises on credit assets on behalf of its Partners, specifically consumer (manufactured housing and recreational vehicle and marine) loans and commercial (inventory finance or floorplan) loans. The Company operates through two segments: Manufactured Housing Finance, and Recreational Vehicles and Marine Finance. It operates through three businesses: Triad Financial Services, which manufactures home loans; Source One Financial, which is engaged in nationwide marine and RV lending; and Intercoastal Finance Group, which is engaged in national marine and RV lending. It provides prime credit portfolio solutions: Secured consumer loan portfolios, which manufactures home loans, and Secured consumer loan portfolios, which provides marine and RV loans.

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ECN Capital Corp

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Post by Blueswinon Nov 03, 2022 11:19am

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Post# 35069772

TD Mario Mendonca

Valuation On our 2022E and 2023E EPS, ECN is trading at 19.2x and 11.5x, respectively, compared with the five-year average (two-years forward) of 12.0x. ECN is also trading at approximately 4.7x Q2/22 BV. Justification of Target Price Our target price of C$5.00 (down from C$8.50) is based on a 15.0x P/E multiple applied to our one year forward EPS estimates (Q1/23E to Q4/23E). Our target P/E and BUY rating are supported by our view that through strategic capital allocation as well as the inherent value of MH financing (affordability) the business will continue to report solid growth, albeit at a slower pace than in 2022.

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