The five Canadian financial stocks on our list with high ROE have been top performers over the past year
SmallCapPower | December 5, 2017: Year to date, the Canadian financial stocks on our list have returned 19.5% on average, outperforming the BMO Equal Weight Banks Index ETF (TO:ZEB), which returned 14.7% over the same period. The list includes a variety of banking operations, ranging from traditional brick and mortar consumer lenders, to operators of branchless banking platforms. In addition, the listed companies have achieved industry-leading Returns on Equity over the last year.
First National Financial Corp. (TO:FN) – $28.81
Corporate Financial Services
First National Financial is the parent company of First National Financial LP, Canada’s largest non-bank lender. The Company operates an investment fund, which provides commercial and residential mortgages. As of June 30, 2017, the Company had ~$100 billion in mortgages under administration.
- Market Cap: $1,728 Million
- YTD Return: 23.9%
- 3 YR EPS Growth: 2.3%
- Return on Equity (TTM): 52.3%
Equitable Group Inc. (TO:EQB) – $67.74
Consumer Lending
Equitable Group operates as a Schedule I bank that offers a variety of residential lending, commercial lending and saving solutions. The Company utilizes a branchless approach, instead working with mortgage brokers, deposit agents and financial planners. Currently, the Company has $22.3 billion in assets and employs 550 individuals across Canada.
- Market Cap: $1,116 Million
- YTD Total Return: 13.4%
- 3 YR EPS Growth: 13.4%
- Return on Equity (TTM): $17.1% Million
MCAN Mortgage Corp. (TO:MKP) – $17.66
Banks
Publicly listed in 1991, MCAN Mortgage Corporation manages a portfolio of mortgages focused primarily on single-family residential and residential construction loans. The Company issues term deposits eligible for CIDC Deposit Insurance, and pays strong dividend returns (Dividend Yield: 8.38%).
- Market Cap: $413 Million
- YTD Total Return: 31.2%
- 3 YR EPS Growth: 4.4%
- Return on Equity (TTM): 13.5%
VersaBank (TO:VB) – $6.15
Banks
VersaBank operates as a Schedule I Canadian Chartered bank that leverages the latest FinTech technology to operate a “branchless banking” platform. The Company sources its funding from a network of deposit brokers across Canada, and utilizes its low-cost business model to provide real estate development and commercial loans to clients at competitive rates.
- Market Cap: $130 Million
- YTD Total Return: 20.6%
- Year over Year EPS Growth: 121.43%
- Return on Equity (TTM): 9.5%
Laurentian Bank of Canada (TO:LB) – $60.53
Banks
Founded in 1846, The Laurentian Bank of Canada operates as chartered Canadian bank serving over 500,000 clients across Canada. Operating a network of 145 branches, the Laurentian Bank employs over 3,600 individuals and has approximately $32 billion in assets under administration.
- Market Cap: $2,351 Million
- YTD Total Return: 8.3%
- Year over Year EPS Growth: 30%
- Return on Equity (TTM): 9.3%
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own units in any of the companies mentioned above.