The TSX financial stocks on our list have attractive P/E ratios relative to the Big 5 Canadian banks
SmallCapPower | March 15, 2018: Moody’s released a report Tuesday warning that the credit quality of Canadian banks was at risk, due to an increase in uninsured mortgages and expected interest rate increases. The BIS and S&P Global Ratings have made similar warnings in the past month. The TSX financial stocks on our list today could be considered attractive for some investors, with favourable forward P/E multiples, averaging 7.3x, relative to the Big 5 Canadian banks, which average 11.4x.
Equitable Group Inc. (TSX:EQB) – $57.60
Consumer Lending
Equitable Group operates as a Schedule I Bank that offers a variety of residential lending, commercial lending and saving solutions. The Company utilizes a branchless approach, instead working with mortgage brokers, deposit agents and financial planners. Currently, the Company has $24.6 billion in assets and employs 550 individuals across Canada.
- Market Cap: $950.6 Million
- Current P/E FY2017: 6.1x
- Forward P/E FY2018: 6.0x
- YTD Total Return: -19.4%
Element Fleet Management Corp. (TSX:EFN) – $5.29
Corporate Financial Services
Element Fleet Management is a Canada-based financial services company focused on the transportation sector. The Company provides fleet management services, including acquisitions, financings, consulting, and the Xcelerate fleet management system. Element has a fleet of 3M vehicles across 50 countries.
- Market Cap: $2,012.1 Million
- Current P/E FY2017: 13.4x
- Forward P/E FY2018: 6.0x
- YTD Total Return: -44.3%
Street Capital Group Inc. (TSX:SCB) – $0.82
Investment Management & Fund Operators
Founded in 2007, Street Capital Group operated as a mortgage lender for 10 years before receiving approval to become a Schedule I Bank. The Company is authorized to issue and sell mortgage-backed securities, as an approved lender with the Canada Mortgage and Housing Corporation (CMHC). Currently, Street Capital has over $25 billion in mortgages under administration.
- Market Cap: $101.2 Million
- Current P/E FY2017: 43.3x
- Forward P/E FY2018: 6.7x
- YTD Total Return: -20.4%
Laurentian Bank of Canada (TSX:LB) – $49.89
Banks
Founded in 1846, the Laurentian Bank of Canada operates as a chartered Canadian bank serving over 500,000 clients across Canada. With a network of 145 branches, the Company employs over 3,600 individuals and manages approximately $47 billion in assets.
- Market Cap: $2,075.1 Million
- Current P/E FY2017: 9.2x
- Forward P/E FY2018: 8.5x
- YTD Total Return: -11.7%
First National Financial Corp. (TSX:FN) – $27.06
Corporate Financial Services
First National is a Canada-based financial services company. The Company’s Residential segment originates single-family residential mortgages, while its Commercial segment is focused on multi-unit residential and commercial mortgages. First National has $32.7M in mortgages under administration. The Company owns a number of financial services subsidiaries and operates out of five offices across Canada.
- Market Cap: $1,622.7 Million
- Current P/E FY2017: 7.9x
- Forward P/E FY2018: 9.3x
- YTD Total Return: -5.0%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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