5 Canadian Small Caps with Strong Earnings Growth Rates

The Canadian small caps on our list have had superior five-year earnings per share growth

SmallCapPower | March 14, 2018: The Canadian and U.S. stock markets have experienced significant volatility in recent months, leading some investors to seek safer returns. The Canadian small caps on our list today have had superior five-year earnings per share growth. Their earnings have increased an average of 71% over five years, outperforming their Canadian peers, which had 3% median growth.

Tree Island Steel Ltd. (TSX:TSL) – $2.70
Iron & Steel

Tree Island Steel is Canada-based steel company focusing on steel wire and other fabricated wire products. The Company uses zinc and carbon steel rods to produce eight product categories, for use in the industrial, residential, commercial, and agricultural markets. Tree Island operates five different brands to sell different product categories to consumers.

  • Market Cap: $80.2 Million
  • 52 Week Total Return: -37.3%
  • 5-Year Historical Growth Rate: 137.2%
  • Forward 5-Year EPS CAGR: 14.1%

Exchange Income Corp. (TSX:EIF) – $34.33
Aerospace

Exchange Income is a Canada-based company focused on the aerospace industry. The Company’s Aerospace & Aviation segment provides scheduled and chartered flights, emergency medical services, after-market support, and custom sensor-equipped aircraft manufacturing and operation. EIF’s Manufacturing segment creates a wide variety of specialized products across multiple industries.

  • Market Cap: $1,082.1 Million
  • 52 Week Total Return: -7.1%
  • 5-Year Historical Growth Rate: 57.8%
  • Forward 5-Year EPS CAGR: 11.4%

Pollard Banknote Ltd. (TSX:PBL) – $22.16
Casinos & Gaming

Pollard Banknote is a Canada-based gaming company operating in Canada and the U.S. The Company specializes in the production of instant tickets, and also produces pull-tab tickets and bingo paper. PBL also operates a number of lottery-related services, including design, storage, online lottery solutions, and marketing and distribution.

  • Market Cap: $567.6 Million
  • 52 Week Total Return: 155.7%
  • 5-Year Historical Growth Rate: 55.5%
  • Forward 5-Year EPS CAGR: 11.4%

Indigo Books and Music Inc. (TSX:IDG) – $19.94
Miscellaneous Specialty Retailers

Indigo Books and Music is a Canada-based retailer focused on books, gifts, and specialty toys. The Company operates 89 superstores and 123 small-format stores totaling ~2,300,000 sq. ft. Indigo also operates an online component, which grew 26% in the past quarter. The Company employs ~6,500 people across Canada.

  • Market Cap: $531.9 Million
  • 52 Week Total Return: 24.6%
  • 5-Year Historical Growth Rate: 54.6%
  • Forward 5-Year EPS CAGR: 16.2%

Sienna Senior Living Inc. (TSX:SIA) – $17.69
Healthcare Facilities & Services

Sienna Senior Living operates seniors living residences across Canada. The Company owns 60 residences and manages an additional 15, totaling ~10,500 suites/beds. The Company aims to expand through new construction, renovation, and acquisitions, planning to redevelop 1,000 long-term care units and add 450 retirement suites over the next five years.

  • Market Cap: $1,125.9 Million
  • 52 Week Total Return: 6.7%
  • 5-Year Historical Growth Rate: 50.8%
  • Forward 5-Year EPS CAGR: 10.3%

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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