5 TSX Small Caps with Near Perfect Earnings Quality Scores

Earnings scores highlight the sustainability of the incomes of the companies on our list

SmallCapPower | October 14, 2016: Companies that make money always want to continue to make money, but how can you judge the certainty of that company to continue to make money? Economic conditions could have been present one fiscal that disappear another, or operating efficiencies and margins could change that cause negative earnings the next year. With all of these variables, there is one calculated value you can look at to judge the sustainability and repeatability of a company’s earnings, which is its earnings quality score (value between 1=worst, and 100=best). The earnings quality region rank score measures how sustainable and repeatable a company’s final earnings are compared to other securities trading in the same region by considering four factors; accruals, cash flow, operational efficiency and the company’s use of exclusions. If you are looking for more stable investments as we enter into a period of potential volatility, with a potential rate hike on the horizon and “The Donald’s” Presidential run still intact, take a look at the companies on our list today, as they all have near perfect earnings quality rank scores.

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SciVacEvertz Technologies Ltd. (TSE:ET) – $16.63
Communications & Networking

Evertz Technologies Limited is an equipment provider to the television broadcast telecommunications and media industries. The Company designs, manufactures and markets video and audio infrastructure equipment for the production, post-production and transmission of television content. The Company’s solutions are purchased by content creators, broadcasters, specialty channels and television service providers to support their multi-channel digital and high definition television (HDTV) and high bandwidth low latency Internet Protocol (IP) network environments, and by telecommunications and new-media companies.

  • Market Cap: $1,233.91 (mm)
  • Earnings Quality Region Rank, Current: 99
  • Earnings Quality Region Rank (FY0): 98
  • Net Income After Taxes (LTM, CAD, Millions): $70.91

SciVacMTY Food Group Inc. (TSE:MTY) – $43.96
Restaurants & Bars

MTY Food Group Inc. is a Canada-based company, which franchises and operates quick-service restaurants. The Company operates in four segments: Franchising, which includes revenue from royalties, supplier contributions, franchise fees, rent, and the construction and renovation of restaurants; Corporate, which includes the direct sale of prepared food to customers; Distribution, which includes distribution of raw materials to restaurants of its Valentine and Franx banners, and processing, which includes the sale of ingredients and prepared food to restaurant chains, distributors and retailers. The Company’s quick-service restaurants operate under various banners, such as Tiki-Ming, Sukiyaki, La Cremiere, Au Vieux Duluth Express, Carrefour Oriental, Panini Pizza Pasta, Franx Supreme, Croissant Plus, Villa Madina, Cultures, Thai Express, Vanellis, Kim Chi, Yogen Fruz, Sushi Shop, Koya Japan, Vie & Nam, Tandori, O’Burger, Tutti Frutti, Taco Time, Country Style, Buns Master and Valentine.

  • Market Cap: $939.62 (mm)
  • Earnings Quality Region Rank, Current: 99
  • Earnings Quality Region Rank (FY0): 93
  • Net Income After Taxes (LTM, CAD, Millions): $36.38

SciVacSirius XM Canada Holdings Inc. (TSE:XSR) – $4.72
Broadcasting

SiriusXM Canada Holdings Inc. is a Canadian subscription-based media company. The Company offers an array of content from the news, entertainment and sports brands, including the NHL, NFL, NBA, NASCAR, CNN, CBC, FOX, BBC, Howard Stern, Oprah, Disney and Comedy Central, among others. The Company, through its subsidiary SXMC, holds the only broadcasting license in Canada to provide subscription-based satellite radio services in Canada.

  • Market Cap: $494.74 (mm)
  • Earnings Quality Region Rank, Current: 99
  • Earnings Quality Region Rank (FY0): 99
  • Net Income After Taxes (LTM, CAD, Millions): $49.73

SciVacTaiga Building Products Ltd. (TSE:TBL) – $0.91
Forest & Wood Products

Taiga Building Products Ltd. (Taiga) is an independent wholesale distributor of building products. The Company distributes its products, which include dimension lumber; panel products, including plywood, particle board and oriented strand board, and allied and treated products, such as roofing materials, moldings, composite decking, polyethylene sheeting, batt and foam insulation, flooring, engineered wood and treated wood. It markets treated wood under the brand name Taiga Select. Taiga maintains inventories of building products at approximately 15 distribution centers throughout Canada and over two distribution centers in California.

  • Market Cap: $29.53 (mm)
  • Earnings Quality Region Rank, Current: 100
  • Earnings Quality Region Rank (FY0): 99
  • Net Income After Taxes (LTM, CAD, Millions): $10.04

SciVacRDM Corp. (TSE:RC) – $4.40
Business Support Services

RDM Corporation is a Canada-based provider of specialized software and hardware products for electronic payment processing. The Company operates in the segment of provision of solutions for electronic payment processing. It provides remote check deposit (RDC) solutions and Web-based image management and transaction processing services for financial institutions, retailers, payment processors and government agencies, as well as print quality control and image quality systems for a range of global customers. The Company’s Cloud-based, Image and Transaction Management System (ITMS) is an e-check processing solution whereby transaction information is remotely captured and processed electronically from distributed locations.

  • Market Cap: $99.56 (mm)
  • Earnings Quality Region Rank, Current: 99
  • Earnings Quality Region Rank (FY0): 82
  • Net Income After Taxes (LTM, CAD, Millions): $5.81