The small cap Canadian stocks we’ve discovered have seen an increase of over 50% in their Return on Equity (ROE) over the past three years
SmallCapPower | October 26, 2021: Return on Equity (ROE) is a measure of how effectively management is using a company’s assets to create profits and is calculated by dividing net income by shareholders’ equity. Today we have uncovered four small cap Canadian stocks trading on the Toronto Stock Exchange (TSX) that have seen an explosive growth in ROE during the past three years.
*Share price data and other metrics as of October 25, 2021
Linamar Corporation (TSX:LNR) – $67.89
Autoparts
Linamar is a publicly traded Canadian manufacturing company that operates worldwide. It is Canada’s second-largest automobile parts manufacturer. Linamar manufactures and supplies products to automotive and industrial markets. Linamar has two divisions: Powertrain/Driveline and Industrial. These are further divided into the areas of machining and assembly, light metal casting, forging, aerial work platforms, and agricultural equipment.
- Market Cap: $4,443.4M
- 30-Day Return: +2.3%
- YTD-Return: +0.7%
- 30-Day Average Trading Volume: 122,800
- ROE (LTM): +11.7%
- ROE (2018): +5.3%
- 3-Year Growth in ROE: +122.4%
goeasy Ltd. (TSX:GSY) – $202.57
Consumer Finance
goeasy is a Canada-based, full-service provider of alternative financial services and has two main business segments: easyfinancial and easyhome. The easyhome segment provides consumer loans for furniture, electronics, computers and appliances, which are offered under weekly or monthly leasing agreements. Easyfinancial has ~$879.0M in consumer loans receivable and a 47% revenue CAGR over past seven years. The easyfinancial segment is its financial services arm, operating in the non-prime consumer lending marketplace. easyfinancial is focused on providing consumer installment loans with $49M in lease assets. The Company operates approximately 200 easyfinancial locations and over 180 easyhome stores across Canada.
- Market Cap: $3,341.7M
- 30-Day Return: -6.9%
- YTD-Return: +109.6%
- 30-Day Average Trading Volume: 76,810
- ROE (LTM): +38.7%
- ROE (2018): +25.2%
- 3-Year Growth in ROE: +53.6%
ATS Automation Tooling Systems Inc. (TSX:ATA) – $41.52
Industrial Machinery & Equipment
ATS Automation Tooling Systems is a Canada-based company, which is engaged in providing automation solutions. The Company provides custom automation, repeat automation, automation products and value-added services, including pre automation and after-sales services. ATS serves the automation systems’ needs of various customers in industries such as life sciences, computer and electronics, energy, transportation and consumer products
- Market Cap: $3,829.4M
- 30-Day Return: -2.0%
- YTD-Return: +85.8%
- 30-Day Average Trading Volume: 155,840
- ROE (LTM): +9.7%
- ROE (2018): +4.5%
- 3-Year Growth in ROE: +114.7%
Laurentian Bank of Canada (TSX:LB) – $40.99
Banks
Founded in 1846, Laurentian Bank Financial Group is a Canada-based chartered bank that provides banking services to individuals, and small and medium-sized enterprises, as well as to independent advisors across the country and operates as a full-service brokerage firm. The Company provides a broad range of advice-based solutions and services to its retail, business and institutional customers. Laurentian has $45.2 billion in balance sheet assets and $29.2 billion in assets under administration.
- Market Cap: $1,783.3M
- 30-Day Return: +0.4%
- YTD-Return: +31.4%
- 30-Day Average Trading Volume: 161,530
- ROE (LTM): +7.4%
- ROE (2018): +4.4%
- 3-Year Growth in ROE: +67.3%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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