The TSX-listed Canadian stocks we’ve identified have had average annualized net income growth of 33.5% per year over the past five years
SmallCapPower | November 18, 2019: Net-income growth gives investors a good snapshot of how efficiently companies have managed their operations and grown their profits. Investors typically prefer stocks with higher net-income growth rates, as they’re better suited for paying dividends or buying back shares, both of which increase the return investors receive. The four TSX-listed Canadian stocks we have discovered today have remained resilient, even in these volatile market conditions. All four stocks have recorded an annual compound annual earnings growth (CAGR) rate of at least 25% over the past five years.
*Share price data as at November 14, 2019, data obtained from S&P Capital IQ
**LTM Net Income as of Q3/19 used as a proxy for F2019 in CAGR calculation
Quebecor Inc. (TSX:QBR.B) – $32.88
Media
Quebecor is a major cable and wireless operator in the province of Quebec. Quebecor operates in the following business segments: Telecommunications, Media, and Sports and Entertainment. Quebecor’s corporate strategy is to capture synergies among its segments and leverage the value of content for the benefit of multiple distribution platforms. The Company also owns select media assets, including a 68.4% equity interest in television broadcaster TVA Group. On November 7, 2019, Quebecor reported Q3/19 financial results, highlighted by revenue of $1.07B, a 1.9% increase YoY, adj. EBITDA of $509.3M, up 7.4% YoY, and EPS of $0.70.
- Market Cap: $8,454.4M
- 30-Day Return: +8.1%
- 90-Day Return: +10.4%
- 90-Day Average Trading Volume: 411,160
- LTM Net Income: $623.0M
- F2015 Net Income: $151.8M
- 5-Year Net Income CAGR: 42.3%
Park Lawn Corporation (TSX:PLC) – $29.30
Funeral Services
Park Lawn is the only Canadian, publicly-listed deathcare company. It offers cemetery, cremation and funeral services in five Canadian provinces (Ontario, Quebec, Manitoba, Saskatchewan, and British Columbia) and 10 U.S. states (Michigan, Kentucky, Texas, Illinois, New York, New Jersey, Kansas, Missouri, New Mexico, and Mississippi). Park Lawn has been swiftly consolidating the deathcare industry. In 2016, the Company had ~90 funeral homes/cemeteries and as of August 2019, Park Lawn has acquired an additional ~140 new assets. The deathcare industry is highly fragmented, with no one company having more than a ~15% market share, and as such there is ample opportunity for Park Lawn to conduct further M&A. With the Baby Boomer generation only getting older it is likely that the funeral business will continue to thrive even amongst a market downturn. On November 12, 2019, Park Lawn reported Q3/19 financial results, highlighted by EPS of $0.05 on revenue of $66.6M, both missed analysts’ expectations of $0.22 and $68.3M.
- Market Cap: $859.7M
- 30-Day Return: +1.7%
- 90-Day Return: +7.0%
- 90-Day Average Trading Volume:76,770
- LTM Net Income: $8.6M
- F2015 Net Income: $3.0M
- 5-Year Net Income CAGR: 30.1%
goeasy Ltd. (TSX:GSY) – $64.95
Consumer Finance
goeasy is a Canada-based, full-service provider of alternative financial services and has two main business segments: easyfinancial and easyhome. The easyhome segment provides consumer loans for furniture, electronics, computers and appliances, which are offered under weekly or monthly leasing agreements. Easyfinancial has ~$879.0M in consumer loans receivable and a 47% revenue CAGR over past seven years. The easyfinancial segment is its financial services arm, operating in the non-prime consumer lending marketplace. easyfinancial is focused on providing consumer installment loans with $49M in lease assets. The Company operates approximately 200 easyfinancial locations and over 180 easyhome stores across Canada. On September 4, 2019, goeasy entered into a strategic partnership and purchased a minority equity interest in PayBright for $34.3M. On November 4, 2019, goeasy reported Q3/19 financial results, highlighted by a 38% increase in revenue to $156M and EPS of $1.28, up 32%. Results were mixed, with revenue slightly beating analyst expectations of $155.5M and EPS missing estimates of $1.41.
- Market Cap: $931.8M
- 30-Day Return: +11.7%
- 90-Day Return: +20.9%
- 90-Day Average Trading Volume: 39,770
- LTM Net Income: $73.6M
- F2015 Net Income: $23.7M
- 5-Year Net Income CAGR: 32.7%
Great Canadian Gaming Corporation (TSX:GC) – $38.83
Casinos and Gaming
Great Canadian Gaming operates 28 gaming, entertainment, and hospitality facilities throughout Ontario, British Columbia, Nova Scotia, New Brunswick, and Washington State. Its facilities include over 16,000 slot machines, 300 table games, 80 dining amenities, and over 500 hotel rooms. The Company is highly committed to its social responsibility initiatives, donating a signification portion of its gross gaming revenues to provincial governments in support of healthcare, education, and social services programs. On November 14, 2019, Great Canadian Gaming reported Q3/19 financial results, highlighted by EPS of $0.85 on revenue of $341.1M.
- Market Cap: $2,193.3M
- 30-Day Return: -6.9%
- 90-Day Return: -5.5%
- 90-Day Average Trading Volume: 164,290
- LTM Net Income: $206.5M
- F2015 Net Income: $74.6M
- 5-Year Net Income CAGR: 28.9%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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