The Globe and Mail attempts to identify Canadian financial stocks offering deep value in a richly valued market in its Friday edition. The Globe's guest columnist Peter Ashton writes in the Number Cruncher column that with United States and Canadian markets rallying strongly since Dec. 24, it is becoming more difficult to find stocks adhering to traditional value-investing characteristics. One Canadian market sector that has retained many attractive value-investing properties is financial services, with an average price-to-earnings ratio of just 13.9 -- the lowest of any Canadian sector. It has been held back by dampened expectations for rate hikes by the Bank of Canada in 2019. As a result, many of the stocks in this sector also offer excellent value as well as attractive dividend and return-on-equity characteristics. Mr. Ashton searched for Canadian financial services stocks with low valuation metrics, strong return on equity and high dividend yields. Mr. Ashton only considered Canadian financial services stocks with a market capitalization of $5-billion or more. Mr. Ashton recommends buying Power Financial, Genworth MI Canada, Canadian Imperial Bank of Commerce, Bank of Nova Scotia and Great-West Lifeco.
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