The Canadian bank stocks we’ve identified are expected to have strong revenue growth during the next two years
SmallCapPower | August 22, 2019: Canadian banks have solid track records. Banks stocks generally follow the economy. These stocks fare better when the economy is growing strongly: companies and individuals are taking out more loans, and interest rates are high. Banks also generally pay out a generous dividend, making them attractive to risk-averse investors. Today we have found four Canadian bank stocks that are expected to grow their revenues at favourable rates over the next two years. We took a look at their 2020 expected revenue then calculated the forward two-year compounded annual growth rate on these companies’ revenue.
*Share prices as at close Friday, August 16, 2019, data obtained from S&P Capital IQ
Canadian Western Bank (TSX:CWB) – $29.22
Regional Banks
CWB Financial Group is a diversified financial services organization serving businesses and individuals across Canada. Operating from its headquarters in Edmonton, Alberta, CWB’s key business lines include full-service business and personal banking offered through branches of Canadian Western Bank, and Internet banking services provided by Motive Financial. On June 6, CWB announced its intent to issue $250M aggregate principal amount of 3.668% Series F Debentures. On June 11, the Company announced that is has closed its domestic public offering of $250M. Net proceeds from the offering will be added CWB’s general funds and utilized for general banking purposes.
- Market Cap: $2.5B
- YTD Return: 10%
- 90 Day Average Trading Volume: 220,000
- 2020E Revenue: $930.8M
- 2 Year Forward Revenue CAGR: 11.1%
Laurentian Bank of Canada (TSX:LB) – $45.06
Regional Banks
Founded in 1846, Laurentian Bank Financial Group is a diversified financial services provider whose mission is to help its customers improve their financial health. With ~3,300 employees, the Company provides a broad range of advice-based solutions and services to its retail, business and institutional customers. On August 13, Laurentian Bank of Canada announced that its Board of Directors declared a $0.2576875 dividend on its preferred shares Series 13 and a dividend of $0.365625 on the preferred shares Series 15, both payable on September 15, 2019.
- Market Cap: $1.9B
- YTD Return: 16.4%
- 90 Day Average Trading Volume: 220,000
- 2020E Revenue: $1B
- 2 Year Forward Revenue CAGR: 3%
The Bank of Nova Scotia (TSX:BNS) – $67.72
Diversified Banks
The Bank of Nova Scotia provides various banking products and services in North America, Latin America, the Caribbean, Central America, and the Asia-Pacific region. BNS serves more than 25M customers through a broad range of personal & commercial banking, wealth management, private banking, corporate banking, investment banking, and capital markets.
- Market Cap: $82.6B
- YTD Return: -0.8%
- 90 Day Average Trading Volume: 2,320,000
- 2020E Revenue: $32.8B
- 2 Year Forward Revenue CAGR: 12%
National Bank of Canada (TSX:NA) – $61.05
Diversified Banks
National Bank of Canada, together with its subsidiaries, form an integrating financial group in Canada. NA provides various financial products and services to retail, commercial, corporate, and institutional clients in Canada and internationally. It has more than 24,000 employees and has been recognized numerous times as a top employer and for its commitment to diversity. On June 6, National Bank of Canada announced that the Toronto Stock Exchange and the Office of the Superintendent of Financial Institutions Canada have approved the Bank’s new normal course issuer bid to purchase for cancellation up to 6M of its common shares, representing ~1.8% of its ~335M common shares.
- Market Cap: $20.5B
- YTD Return: 8%
- 90 Day Average Trading Volume: 1,090,000
- 2020E Revenue: $7.9B
- 2 Year Forward Revenue CAGR: 7.5%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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