The Globe and Mail attempts to identify value and safety among Canadian financial stocks in its Thursday, June 11, edition. The Globe's guest columnist Sean Pugliese writes that the banks recently posted their quarterly earnings and the results generally seemed to be well received by the market. That got Mr. Pugliese thinking about financial stocks generally. Financials dominate the Canadian market, usually pay good dividends and exhibit good safety and value characteristics. Mr. Pugliese started his search by filtering for Canadian exchange-listed names in the financial sector with a minimum market capitalization of $5-billion. Mr. Pugliese calls market cap a safety factor. He also considered the dividend yield, which he says reflects safety and stability. Then he considered debt-to-equity as his final safety factor. It is the debt outstanding divided by shareholders equity. Mr. Pugliese says lower leverage or debt levels are preferred. He looked for a low number in the price-to-earnings category. Mr. Pugliese's recommended picks are Manulife Financial, Sun Life Financial, Great-West Lifeco, National Bank of Canada and Intact Financial.
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