The S&P/TSX Composite Index was down 79 points in early afternoon trading on Friday, June 9. Some of the worst-performing sectors included health care, industrials, and base metals. Today, I want to focus on two Canadian financial stocks that I’m looking to target as we hope for clearer sailing ahead after rough few weeks in April, May, and the beginning of June. Let’s jump in.
This undervalued financial stock is also a Dividend Aristocrat!
goeasy (TSX:GSY) is the first financial stock I’d suggest investors snatch up before the midway point in June 2023. This Mississauga-based company provides non-prime leasing and lending services under the easyhome, easyfinancial, and LendCare brands to Canadian consumers. Shares of this financial stock have climbed 12% month over month at the time of this writing. That has pushed the stock into positive territory in the year-to-date period.
This company released its first-quarter (Q1) fiscal 2023 earnings on May 9. goeasy produced loan originations of $616 million, which was up 29% compared to Q1 fiscal 2022. That growth was powered by improved results across goeasy’s range of products and channels that included unsecured lending, home equity loans, and more. Its loan portfolio climbed 39% year over year to $2.99 billion.
The growth of its loan portfolio fueled adjusted operating income growth of 24% to $106 million in Q1 2023. Meanwhile, adjusted net income hit a record $52.9 million — up 16% compared to the previous year. Earnings before interest, taxes, depreciation, and amortization increased 56% from the prior year to $117 million.
goeasy delivered its 87th straight quarter of positive net income in the quarter. Meanwhile, it reached total customers served of 1.3 million. This alternative lender is still geared up for strong growth going forward.
Shares of this financial stock currently possess a favourable price-to-earnings ratio of 10. goeasy offers a quarterly dividend of $0.96 per share. That represents a 3.5% yield. The company has delivered nine straight years of dividend growth.
Here’s another financial stock I’m looking to snatch up in June 2023
Manulife Financial (TSX:MFC) is a Toronto-based company that provides financial products and services in North America, Asia, and around the world. Shares of this financial stock have dipped 3.5% month over month as of early afternoon trading on June 9. Manulife stock is still up 5.6% so far in 2023.
Investors got to see Manulife’s first batch of fiscal 2023 earnings on May 10. On the business front, management stated that “in Asia,” the company “continued to leverage our health and wellness platform, ManulifeMOVE, to drive incremental sales.” Moreover, it accelerated its user adoption of its customer website in Vietnam. Asia remains a key driver for growth at this Canadian insurance giant.
Asia annualized premium equivalent (ABE) sales rose to $1.17 billion in Q1 fiscal 2023 — up from $1.08 billion in the previous year. Total APE sales dipped marginally to $1.60 billion.
This financial stock lad had an attractive P/E ratio of 8.8. Moreover, Manulife offers a quarterly dividend of $0.365 per share, which represents a strong 5.6% yield.