The Globe and Mail attempts to identify financial heavyweights filtered by safety and value investing metrics in its Thursday, July 11, edition. The Globe's guest columnist Sean Pugliese writes in the Number Cruncher column that he filtered for Canadian exchange-listed names in the financial sector with a minimum market capitalization of $5-billion. Market cap is a safety factor. Mr. Pugliese says generally, larger companies are more liquid and stable. He considered dividend yield, which Mr. Pugliese says generally reflects safety and stability. He looked at the debt-to-equity ratio as another safety factor. Mr. Pugliese searched for positive changes to earnings momentum. A positive number implies earnings are growing while the opposite is true for a negative number. He says positive earnings momentum over the long term should translate to share price appreciation and perhaps dividend hikes. He also considered return on equity, the higher number the better. He also looked for a positive 52-week total return as a performance measure. Higher figures preferred. Mr. Pugliese's recommended picks are Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, TMX Group and Brookfield Management.
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