Equitable Group (EQB-T)

It is very well managed and has a high ROE. There are risks in the sector with a real estate slowdown. Still not priced low enough yet, so wait.

One of the criteria we used is Total long-term debt to Total Equity less than 1.5x, and EQB does not meet those criteria. 
However, we think EQB’s capital base is good, growth has been strong recently. 
We like EQB and would be comfortable holding it for the long term. 
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. 10-year ROE average of 16.6%. More than 340,000 customers. Recent acquisition of Concentra Bank. Strong balance sheet and valuation. Unlock Premium - Try 5i Free

He thinks this mortgage lender has a dividend that is growing and trades at a low PE ratio. It is not a low risk company, as it makes loans to non-conventional borrowers. At this point in the market cycle, with high consumer debt, he would prefer to own a bank with larger market cap and higher liquidity. Yield 1.5%.

Mortgage financing when housing has cooled off. But EQB just announced they will relinquish some of their standby facilities that they took on during the Home Capital crisis last year--this will save them 25-cents a share in earnings next year and cost them a non-cash write-off. It boasts 5.5x earnings and a solid dividend. A potential for buybacks. This stock will be much higher in 2019. (Analysts' price target: $70.00)

(A Top Pick Jun. 26/17, Down 5%) They are now the largest in the industry. They are extremely well managed. They had record results and raised the dividend several times since he recommended it. It is trading below book value. It is a great value investment and is growing well despite the new mortgage rules. Customers wanting to take mortgages elsewhere are subject to the new stress tests.

Small financial in Canadian mortgage business. Stock struggling because it is in the Canadian mortgage business. Cheap stock and well run. He does not think that mortgages will be a massive problem.

Canadian Banks? He looks favourably on Canadian banks in general, because he likes the backdrop for energy. This is his favourite, and is actually the smallest of the group. Trades at the lowest valuation of the entire group. Trades at 1X Book compared to the National Bank (NA-T) at 2X. The Canadian bank trade should continue to drift higher.