4 Canadian stocks with star earnings growth
The Canadian stocks listed on the Toronto Stock Exchange that we have identified have experienced average annual growth in net income of 33.5% per year over the past five years.
SmallCapPower | November 18, 2019: The growth in net income gives investors a good idea of how efficiently companies have managed their operations and increased their profits. Investors generally prefer stocks with higher growth rates of net income because they are better suited for paying dividends or buying back stocks, both of which increase the return investors receive. The four Toronto Stock Exchange-listed Canadian stocks that we found today have held up, even in these volatile market conditions. All four stocks have experienced a compound annual earnings growth rate (CAGR) of at least 25% over the past five years.
* Share price data as of November 14, 2019, data obtained from S&P Capital IQ
** Q3 / 19 LTM net income used as proxy for F2019 in the CAGR calculation
Quebecor inc. (TSX: QBR.B) – $ 32.88
Quebecor is a major cable operator and wireless operator in the province of Quebec. Quebecor operates in the following business segments: Telecommunications, Media, and Sports and Entertainment. Quebecor’s corporate strategy is to capture synergies between its segments and leverage the value of content for the benefit of multiple distribution platforms. The Company also owns selected media assets, including a 68.4% interest in broadcaster Groupe TVA. On November 7, 2019, Quebecor released its Q3 / 19 financial results, highlighted by revenue of $ 1.07 billion, a 1.9% year-over-year increase, adj. EBITDA of $ 509.3 million, up 7.4% year-on-year, and EPS of $ 0.70.
- Market capitalization: $ 8,454.4 million
- 30-day return: + 8.1%
- 90-day return: + 10.4%
- 90-day average trading volume: 411,160
- LTM net earnings: $ 623.0 million
- F2015 net income: $ 151.8 million
- 5-year net income CAGR: 42.3%
Park Lawn Society (TSX: API) – $ 29.30
Park Lawn is Canada’s only publicly traded death care company. It offers cemetery, cremation and funeral services in five Canadian provinces (Ontario, Quebec, Manitoba, Saskatchewan and British Columbia) and 10 American states (Michigan, Kentucky, Texas, Illinois, New York, New Jersey, Kansas, Missouri, New Mexico, and Mississippi). Park Lawn quickly consolidated the death care industry. As of 2016, the company had approximately 90 funeral homes / cemeteries, and as of August 2019, Park Lawn had acquired approximately 140 additional new assets. The death care industry is highly fragmented with no company holding more than around 15% of the market share, and as such, Park Lawn has ample opportunity for further mergers and acquisitions. With the baby boomer generation only getting older, it is likely that the funeral industry will continue to thrive even in a downturn in the market. On November 12, 2019, Park Lawn released financial results for the third quarter of 19, highlighted by EPS of $ 0.05 on revenue of $ 66.6 million as both analysts missed expectations. of $ 0.22 and $ 68.3 million.
- Market capitalization: $ 859.7 million
- 30-day yield: + 1.7%
- 90-day return: + 7.0%
- 90-day average trading volume: 76,770
- LTM net profit: $ 8.6M
- F2015 net profit: $ 3.0 million
- 5-year net income CAGR: 30.1%
goeasy Ltd. (TSX: GSY) – $ 64.95
goeasy is a Canada-based full service provider of alternative financial services and has two main business segments: easyfinancial and easyhome. The easyhome segment offers consumer loans for furniture, electronics, computers and home appliances, which are offered under weekly or monthly rental contracts. Easyfinancial has approximately $ 879.0 million in consumer loans receivable and a 47% CAGR in revenue over the past seven years. The easyfinancial segment is its financial services arm, operating in the non-senior consumer loan market. easyfinancial is focused on providing consumer installment loans with $ 49 million in rental assets. The Company operates approximately 200 easyfinancial locations and over 180 easyhome stores across Canada. On September 4, 2019, goeasy entered into a strategic partnership and purchased a minority stake in PayBright for $ 34.3 million. On November 4, 2019, goeasy released its financial results for Q3 / 19, highlighted by a 38% increase in revenue to $ 156 million and EPS of $ 1.28, up 32% . Results were mixed, with revenue slightly above analysts’ expectations of $ 155.5 million and missing EPS estimates of $ 1.41.
- Market capitalization: $ 931.8 M
- 30-day yield: + 11.7%
- 90-day return: + 20.9%
- 90-day average trading volume: 39,770
- LTM net profit: $ 73.6 million
- F2015 net income: $ 23.7 million
- 5-year net income CAGR: 32.7%
Great Canadian Gaming Society (TSX: GC) – $ 38.83
Casinos and gambling
Great Canadian Gaming operates 28 gaming, entertainment and hospitality facilities in Ontario, British Columbia, Nova Scotia, New Brunswick and Washington State. Its facilities include more than 16,000 slot machines, 300 table games, 80 restaurants and more than 500 hotel rooms. The Company is very committed to its social responsibility initiatives, donating a significant portion of its gross gaming revenues to provincial governments to support health care, education and social service programs. On November 14, 2019, Great Canadian Gaming released its financial results for Q3 / 19, highlighted by EPS of $ 0.85 on revenue of $ 341.1 million.
- Market capitalization: $ 2,193.3 million
- 30-day return: -6.9%
- 90-day yield: -5.5%
- 90-day average trading volume: 164,290
- LTM net profit: $ 206.5 million
- F2015 net income: $ 74.6 million
- 5-year net income CAGR: 28.9%
Disclosure: Neither the author nor his family own any shares in any of the companies mentioned above.
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