When choosing a financial stock as an investment, analysis is heavily balance-sheet based, with an increased focus on equity growth and Return on Equity (ROE). Since a financial institution deals mostly with large sums of money, through lending and investing activities, its balance sheet is its most important statement. The average ROE for Canadian financial companies, excluding the Big 5 banks, is 9.4%. Thus, the stocks on our list today excel with a Return on Equity that exceeds 15%.
Gluskin Sheff + Associates Inc. (TSX: GS) – $19.41
Investment Management & Fund Operators
Gluskin Sheff + Associates Inc. (Gluskin Sheff) is a Canada-based, independent wealth management firm. It manages investment portfolios for private clients as well as selected institutional investors, including family offices, foundations, endowments and both public and private pension plans.
- Market Cap: $646,733,799
- ROE: 41.6%
- Net Income (LTM): $52,311,000
- Average Total Equity (12 months): $125,675,000
CI Financial Corp. (TSX: CIX) – $29.21
Investment Management & Fund Operators
CI Financial Corp. (CI) is a Canada-based investment fund company that offers diversified wealth management solutions. The Company, through CI Investments Inc., offers investment funds and services under the CI, Cambridge, Harbour, Signature, Synergy, Portfolio Series, Portfolio Select Series, CI Guaranteed Retirement Cash Flow Series and SunWise Essential Series banners.
- Market Cap: $8,180,198,810
- ROE: 29.6%
- Net Income (LTM): $559,069,000
- Average Total Equity (12 months): $1,890,455,000
Home Capital Group Inc. (TSX: HCG) – $32.33
Banks
Home Capital Group Inc. is a Canada-based holding company that operates through its subsidiary, Home Trust Company (Home Trust). Home Trust is a federally regulated trust company offering insured and uninsured deposits, residential and non-residential commercial mortgage lending, retail credit, credit card issuing services and consumer lending.
- Market Cap: $2,267,162,400
- ROE: 21.6%
- Net Income (LTM): $314,294,000
- Average Total Equity (12 months): $1,454,042,000
First National Financial Corp. (TSX: FN) – $21.13
Corporate Financial Services
First National Financial Corporation is the parent company of First National Financial LP, a Canadian-based originator, underwriter and servicer of prime single family residential, multi-unit residential and commercial mortgages through its residential underwriting branches in Toronto, Calgary, Vancouver and Montreal. The Company sources its single family mortgages through independent mortgage brokers and its customer base and sources its multi-unit residential and commercial mortgages through its in-house mortgage underwriters.
- Market Cap: $1,255,625,415
- ROE: 20.7%
- Net Income (LTM): $84,941,000
- Average Total Equity (12 months): $411,179,000
IGM Financial Inc. (TSX: IGM) – $33.40
Investment Management & Fund Operators
IGM Financial Inc. is a Canada-based financial services company. Its principal businesses are Investors Group Inc. and Mackenzie Financial Corporation, which operate within the advice segment of the financial services market. The Company operates in three segments: Investors Group, which provides a range of financial and investment planning services through its network of Consultants across the country and its products and services include Personal Financial Planner and Mutual Funds, among others; Mackenzie, which is an investment management firm and is engaged in the provision of investment management and related services offered through diversified investment solutions and distributed through multiple distribution channels, and Corporate and Other segment includes net investment income, share of earnings of its affiliate, Great-West Lifeco Inc. (Lifeco), operating results for Investment Planning Counsel Inc., other income, as well as consolidation elimination entries.
- Market Cap: $8,403,901,502
- ROE: 15.8%
- Net Income (LTM): $767,360,000
- Average Total Equity (12 months): $4,842,056,000
Want more Investment Ideas? See our 5 Canadian Financial Stocks with 10%+ Dividend Growth >>
