The Globe and Mail reports in its Tuesday, July 5, edition that everyone appreciates large Canadian banks.
The Globe's guest columnist Anthony Menard writes in the Number Cruncher column that unfortunately, when a stock is highly appreciated it will naturally sell at a higher price and Canadian banks are no different. Mr. Menard believes that smaller companies in the financial sector could be overlooked owing to the large weightings portfolio managers typically assign large Canadian banks. Mr. Menard only considered Canadian financials with a market capitalization between $500-million and $10-billion, which would exclude any of the Big Six banks. Mr. Menard looked for companies that had better than average risk-adjusted return on capital. Companies had to have better than average earnings-per-share growth. He also looked at five-year annualized earnings-a-share growth, four-year annualized dividend growth, one-year dividend growth, return on capital, beta, price-to-earnings and price-to-book ratios, dividend yield and one-year price return. Mr. Menard recommends looking at Clairvest Group, Canaccord Genuity Group, Guardian Capital Group, iA Financial, Canadian Western Bank and First National Financial.
© 2023 Canjex Publishing Ltd. All rights reserved.