The alternative lending stocks on our list all have lofty growth plans, which haven’t been fully realized by the market
SmallCapPower | May 11, 2017: When Home Capital Group (TSX: HCG) stock plunged nearly 70% it dragged the entire lending industry down with it, which has created some good opportunities for any value-orientated investor. Today we have identified four alternative lending stocks that all have below average PE ratios, and have low PEG ratios, meaning that their targeted growth prospects are not yet fully priced into the stock. If growth plans are executed, these companies could soar in the near term.
Equitable Group Inc. (TSX: EQB) – $48.37
Consumer Lending
Equitable Group Inc. is a financial services business that operates through its wholly-owned subsidiary, Equitable Bank (the Bank). Equitable Bank serves retail and commercial customers across Canada with a range of savings solutions and mortgage lending products, offered under the Equitable Bank and EQ Bank brands. Equitable Bank provides mortgage loans to a range of customers that include business-for-self borrowers, newcomers to Canada and commercial real estate investors.
- Market Cap: $796,902,957
- Total Revenue (LTM): $581,994
- YTD Price Change: -20.0%
- PE: 5.19x
- PEG: 0.72
Rifco Inc. (TSXV: RFC) – $1.75
Consumer Lending
Rifco Inc. is a Canada-based auto purchase finance company that operates through its subsidiary, Rifco National Auto Finance Corporation, and is engaged in vehicle financing. The Company provides non-traditional vehicle financing to motorists through a network of select new and used vehicle retailers. The Company’s auto financing is available to both franchise and independent dealers who want to create a partnership. The Company specializes in building long-term partnerships with vehicle dealers by providing personalized services through account managers, and operates in all provinces in Canada except Quebec.
- Market Cap: $37,881,193
- Total Revenue (LTM): $33,983,430
- YTD Price Change: -5.4%
- PE: 12.34x
- PEG: 0.22
Street Capital Group Inc. (TSX: SCB) – $1.21
Consumer Lending
Street Capital Group Inc., formerly Counsel Corporation, is a financial services company that operates principally as a mortgage lending business. It carries on its mortgage lending business through its subsidiary, Street Capital Financial Corporation (Street Capital Financial), which is a residential mortgage lender. Street Capital sells its mortgages to various financial institutions in Canada. The Company holds interests in a private equity business through its subsidiary, Knight’s Bridge Capital Partners Inc.
- Market Cap: $147,445,261
- Total Revenue (LTM): $140,175,000
- Debt to Equity (LTM): 152.0%
- YTD Price Change: -35.6%
- PE: 11.82x
- PEG: 0.21
goeasy Ltd. (TSX: GSY) – $33.06
Consumer Lending
goeasy Ltd. is a Canada-based, full-service provider of goods and alternative financial services. The Company is engaged in providing loans and other financial services to consumers, and leasing household products to consumers. It operates in two segments: easyfinancial and easyhome. Its easyhome segment consists of four product categories: furniture, electronics, computers and appliances, which are offered under weekly or monthly leasing agreements. easyhome operates through both corporately owned stores located across Canada and through a network of franchised locations. Additionally, it operates an e-commerce platform that allows customers to enter into merchandise leasing transactions through online channels.
- Market Cap: $441,450,000
- Total Revenue (LTM): 359,893,000
- Debt to Equity (LTM): 133.7%
- YTD Price Change: 36.1%
- PE: 13.55x
- PEG: 0.48
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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