The Canadian financial stocks on our list are returning the most profit per shareholder dollar
SmallCapPower | April 4, 2017: Today we have identified five Canadian financial stocks with the highest return on equity. Return on Equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders’ equity. It is calculated by dividing a company’s net income by the total shareholders’ equity. This measurement is a good indicator of efficiency; a rising ROE implies that a company is increasing its ability to generate profits without needing as much capital.
First National Financial Corp. (TSX: FN) – $26.70
Corporate Financial Services
First National Financial Corporation is a Canada-based parent company of First National Financial LP (FNFLP), which is an originator, underwriter and servicer of prime residential (single-family and multi-unit) and commercial mortgages. The Company operates through two segments: Residential (which includes single-family residential mortgages) and Commercial (which includes multi-unit residential and commercial mortgages). The Company provides mortgage-financing solutions to the mortgage market in Canada. The Company also invests in short-term mortgages, usually for six- to 18-month terms.
- Market Cap: $1,601.1 million
- Revenue (FY0): $1,049.8 million
- YTD Price PCT Change: -0.9%
- Return On Equity (FY0): 37.8%
Gluskin Sheff + Associates Inc. (TSX: GS) – $17.58
Investment Management & Fund Operators
Gluskin Sheff + Associates Inc. is a wealth management company serving high net worth private clients and institutional investors. The Company provides discretionary investment management services. It provides private client services to high net worth investors, including entrepreneurs, family trusts, private charitable foundations and estates. The Company separates the management of its portfolio models from the provision of advice to clients on their individual asset mix needs. Its portfolio models encompass a range of investment strategies and include long-only equity, credit alternative and fixed income.
- Market Cap: $549.1 million
- Revenue (FY0):$142.1 million
- YTD Price PCT Change: 0.8%
- Return on Equity (FY0): 28.0%
Fiera Capital Corp. (TSX: FSZ) – $13.78
Investment Banking & Brokerage Services
Fiera Capital Corp is a Canada-based independent, full-service, multi-product investment company. It provides investment advisory and related services to institutional investors, private wealth clients and retail investors. It operates through investment management services segment in Canada and the United States. It offers institutional clients a range of traditional and alternative investment strategies through specialized and balanced mandates. Its diverse client base includes pension funds, endowments, foundations, religious and charitable organizations as well as large municipal and university funds. It offers management services and investment counselling, catering to the specific needs of private clients and high-net-worth individuals and their families, as well as endowments and foundations.
- Market Cap: $841.5 million
- Revenue (FY0): $344.1 million
- YTD Price PCT Change: 7.8%
- Return On Equity (FY0): 18.3%
Information Services Corp. (TSX: ISV) – $19.50
Real Estate Services
Information Services Corp is a Canada-based full-service provider of registry and information services and solutions to governments and private sector organizations. The Company’s segments include Registries and Services. The Registries segment involves the provision of registry and information services and solutions to governments and private sector organizations. The Company provides registry and information services to the Province of Saskatchewan and is the provider of the Land Registry, the Personal Property Registry and the Corporate Registry in Saskatchewan. The Services segment provides law firms, corporations, financial service institutions and others with services to fulfill a range of their clients’ public records due diligence, filings and corporate supply requirements in connection with public business registries in Canada and certain other countries.
- Market Cap: $341.3 million
- Revenue (FY0): $88.4 million
- YTD Price PCT Change: 7.5%
- Return On Equity (FY0): 17.5%
Rifco Inc. (TSXV: RFC) – $1.55
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. The Company operates in all provinces in Canada except Quebec.
- Market Cap: $33.4 million
- Revenue (FY0, Default): $37.4 million
- YTD Price PCT Change: -16.2%
- Return on Equity (FY0): 16.6%
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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