The financial sector is the backbone of the Canadian stock market, currently accounting for over 30% of the TSX Composite Index. From large banks to well-known insurance and asset management firms, these fundamentally strong companies provide stability and steady dividends.
Whether you’re an income investor looking for attractive dividends or a growth investor seeking long-term capital gains, the shifting economic environment in 2025 makes now an excellent time to consider some of the best financial stocks in Canada. Let’s take a closer look at two top financial stocks that could be strong additions to your portfolio right now.
Power Corporation stock
Power Corporation of Canada (TSX:POW) is a Montreal-based financial services giant with a diverse portfolio, including insurance, wealth management, and investment businesses. Through its subsidiaries, such as Great-West Lifeco and IGM Financial, Power Corporation has built a strong presence in Canada’s financial sector.
After rallying by 15.2% over the last year, POW stock currently trades at $44.67 per share with a market cap of $26.3 billion. The fact that the stock also offers a solid annualized dividend yield of 5.1% makes it even more attractive for investors who love passive income.
Now, let’s take a closer look at its recent financial performance. In the quarter ended in September 2024, Power Corporation’s adjusted net asset value rose 8.2% YoY (year over year) to $57.9 per share with the help of the strong performance of its key publicly traded subsidiaries. Despite a decline in its reported net profit, its increased retained earnings and positive asset valuation adjustments helped the financial giant post a 4.6% YoY increase in its book value to $34 per share.
Besides Power Corporation’s strong dividend and diversified business model, its long-term strategy makes it even more appealing. The firm continues to focus on expanding its alternative asset investments through Sagard and Power Sustainable, which raised $1.9 billion in new commitments in the first three quarters of 2024. These positive fundamentals make POW an excellent choice for long-term investors seeking exposure to Canada’s financial sector.
EQB stock
EQB (TSX:EQB) is another top Canadian financial stock you can consider in 2025. This Toronto-based company operates through Equitable Bank, which has gained popularity as a top digital financial services provider with its EQ Bank platform growing its customer base at an impressive pace.
While it might not be as widely recognized among the country’s Big Five banks, its performance has been remarkable. After rallying by 15.3% over the last year, EQB stock currently trades at $106.59 per share with a market cap of $4.1 billion. It also rewards shareholders with quarterly dividends, offering a 1.7% annualized yield, which is not very high but still a nice bonus for investors.
On the financial front, EQB just wrapped up its most profitable year on record. For its fiscal year 2024 (ended in October), the bank’s total revenue crossed the $1 billion mark for the first time, climbing to $1.26 billion. Its adjusted annual earnings also jumped by 17.3% YoY to $11.03 per share.
Besides these solid numbers, EQB’s bold expansion strategy and consistent focus on digital offerings brighten its long-term growth outlook.
