TSX:DLCG - Post Discussion
Post by
tinkvid on Nov 18, 2021 9:26am
DLCG - Globe says Dominion's fundamentals seen improving
2021-11-18 08:26 ET - In the News
The Globe and Mail reports in its Thursday, Nov. 17, edition that Desjardins Securities analyst Gary Ho has reiterated his "buy" recommendation for Dominion Lending Centres. The Globe's David Leeder writes in the Eye On Equities column that Mr. Ho boosted his share target to $6.50 from $6. On Tuesday, the mortgage firm reported third quarter earnings before interest, taxes, depreciation and amortization of $13.8-million, exceeding Mr. Ho's $11.4-million estimate. The Globe notes that the "strong" EBITDA margin of 61.9 per cent and mortgage volumes of $22.6-billion also topped his projections (57.6 per cent and $19.6-billion). Mr. Ho says in a note: "While the stock price has retreated, Dominion Lending's fundamentals have improved -- a record $75-billion in LTM [last 12-month] funded mortgages, healthy 62-per-cent margin, increase in velocity penetration to 47 per cent and reduction in leverage to sub-1 times. ... The shares offer an attractive pro forma 17-per-cent FCF yield. We increased our estimates, with our bullish view remaining unchanged." The Globe reported on May 27 and Aug. 25 that Mr. Ho continued to rate Dominion Lending "buy." The shares could then be had for $4 and $3.45.
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