The S&P/TSX Composite Index was up 95 points in late morning trading on August 27. Indexes also surged south of the border after a separate trade agreement was reached between Mexico and the US. President Trump discarded the NAFTA name in a symbolic move, as Canada has yet to reach its own agreement with the largest global economy.
Earlier this month, I’d discussed how a NAFTA deal in August could boost banks and other stocks on the TSX. Unfortunately, Canada has remained on the sidelines. Federal leadership has expressed optimism that a deal can be reached in the near future, but investors should be cautious as we approach September. Today we are going to look at three stocks that offer a nice balance of capital growth potential and a modest dividend.
Equitable Group (TSX:EQB)
Equitable Group stock was up 0.31% in early afternoon trading on August 27. Shares are up 3.3% over the past three months. In the second quarter Equitable Group saw adjusted diluted earnings per share rise 8% year-over-year to $245 and deposits rose 24% to $12.4 billion. Canada’s choppy housing market has greatly stabilized in comparison to the trouble that emerged in the spring and summer of 2017. Equitable Group also achieved all-time highs in single family lending mortgage principal and commercial lending mortgage principal.
The board of directors also approved of a 17% year-over-year increase in its quarterly dividend to $0.27 per share. This represents a 1.6% dividend yield.
Goeasy is a Mississauga-based financial services company that offers merchandise lending of home products. It also offers unsecured installment loans. Back in July I’d explained why goeasy was my top stock for millennial investors ahead of its Q2 earnings release. Shares are up 23% over the past month as of early afternoon trading on August 27.
Goeasy released its second-quarter results on August 7. Revenue was up 26.4% year-over-year to $123.3 million and it posted loan book growth of 121.7% to $686.6 million. The company experienced positive growth in its easyfinancial and easyhome segments. Overall it achieved its 68th consecutive quarter of positive net income, and operating margin increased to 21.7% from 19.1% in the prior year.
The company also approved a quarterly dividend of $0.225 per share, representing a 1.5% dividend yield.
Restaurant Brands stock has plunged 7.7% over the past month. Shares were down 0.55% in early afternoon trading on August 27. Restaurant Brands reported a solid second quarter as total revenues rose to $1.34 billion from $1.14 billion in the prior year. However, adjusted EBITDA continued to lag at Tim Hortons and Popeyes, while Burger King remained the standout. The stock has also been hurt by the surprise announcement that Tim Hortons opted to close four US locations in August.
Still, Restaurant Brands leadership has laid out an ambitious plan to boost results at Tim Hortons. Investors may want to look out for entry points over the course of its current slide. The company last declared a dividend of $0.45 per share, representing a 2.2% dividend yield.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC.