Kalkine Media explores 5 TSX financial stocks to watch in December

Highlights

• In Q3, 2022, the bank’s total revenue was reported at C$ 15,563 million.
• goeasy reported total operating expenses at C$ 170.83 million in Q3 2022.
• In Q4 2022, Royal Bank of Canada’s net income was C$ 3,882 million.

Canada’s financial sector contributes a significant amount to the overall stock market. Currently, inflation is slowing down and leading to several changes in the market.

Credit bureau data shows that inflation forced Canadians to rely on more credit during the third quarter. Approximately 27.9 million Canadians held a combined outstanding credit balance of C$ 2.29 trillion, which is an increase of 7.9 per cent from the previous year. With consumers relying on the higher cost of living, credit cards and balances increased by two per cent from the previous year. For millennials, non-mortgage balances grew by 13.3 per cent.

With the ever-changing trends and preferences of the market, investors can operate with a stable approach by checking the growth prospects of different stocks.

Relying on credit may be the new trend in the market but as an investor, consider the past trends as well. It is crucial to know the tactics to handle market volatility.

Amid the changing preferences, let us look at five stocks mentioned below along with their recent financial highlights:

1. Toronto-Dominion Bank (The) (TSX:TD)

Toronto-Dominion Bank is a Canadian bank that operates under three business segments-the US and Canadian retail banking and wholesale banking. The bank has a presence in the Northeast along with operations from Florida to Maine. Further, the bank owns a 13 per cent stake in Charles Schwab.

In Q3, 2022, Toronto-Dominion's total revenue was reported at C$ 15,563 million compared to C$ 10,941 million in Q3 2021. The reported net income increased to C$ 6,671 million from C$ 3,781 million for the same comparable period.

The bank’s total assets were reported at C$ 1,917.5 billion from C$ 1,728.7 billion. The bank’s dividend yield rose to 4.2 per cent from 3.7 per cent. The bank distributed a quarterly dividend of C$ 0.96 per share with a dividend yield of 4.158 per cent. The five-year dividend growth was posted at 7.47 per cent and the EPS is C$ 9.49.

On August 2, 2022, TD acquired Cowen Inc.

2. Bank of Nova Scotia (The) (TSX:BNS)

Bank of Nova Scotia is a financial services provider with five business segments- Global wealth management, international banking, Canadian banking, global banking, and markets, and other. Further, the bank offers advice on personal and commercial banking, investment and corporate banking, wealth management, and capital markets.

In Q3 2022, Bank of Nova Scotia posted its net interest income at C$ 4,622 million compared to C$ 4,217 million in Q3 2021. The total revenue declined to C$ 7,626 million from C$ 7,687 million for the same comparable period. The basic earnings per share fell to C$ 1.64 from C$ 1.98 for the reported quarter. The total assets of the bank grew to C$ 1,349,418 million from C$ 1,184,844 million. The bank authorized a quarterly dividend of C$ 1.03 with a dividend yield of 5.976 per cent. The EPS is C$ 8.05.  

3. goeasy Ltd. (TSX:GSY)

goeasy Ltd. is a financial services provider that facilitates owing appliances, computers, and electronics. Further, the company offers merchandize leasing on a weekly or monthly basis to consumers and offers unsecured installment loans to consumers as well. The company’s segments include- easyfinancial and easyhome.

In Q3 2022, goeasy reported its revenue at C$ 262.21 million compared to C$ 219.76 million in Q3 2021. For the same period, the company’s total operating expenses increased to C$ 170.83 million from C$ 138.41 million. Meanwhile, the operating income grew to C$ 91.37 million from C$ 81.35 million.

goeasy’s EBITDA decreased to C$ 105.28 million from C$ 116.69 million for the reported quarter. The adjusted net income rose to C$ 48.62 million from C$ 46.74 million. goeasy paid a quarterly dividend of C$ 0.91 per share and posted a dividend yield of 3.024 per cent. Further, the company reported a three-year dividend growth of 37.14 per cent.

Diluted EPS of goeasy Ltd. in two different quarters:

4. Royal Bank of Canada (TSX:RY)

Royal Bank of Canada offers commercial and personal banking along with other diversified financial services. The other services include corporate banking, capital markets, and insurance.

In Q4 2022, Royal Bank of Canada’s total revenue increased to C$ 12,567 million from C$ 12,376 million in Q4 2021. The net income decreased to C$ 3,882 million from C$ 3,892 million for the same comparable period. The basic earnings per share rose to C$ 2.75 from C$ 2.68. The company’s total assets were C$ 1,917,219 in the reported quarter compared to C$ 1,706,323 million in the corresponding quarter a year ago. The company’s quarterly dividend was noted at C$ 1.32 with a dividend yield of 3.934 per cent.

On November 29, 2022, Royal Bank of Canada acquired HSBC Bank Canada.

5. Bank of Montreal (TSX:BMO)

Bank of Montreal is a financial-services provider with the business segments-wealth management, commercial and personal banking. The bank has a presence in Canada and a material portion in the US.

In Q3 2022, Bank of Montreal’s net interest income rose to C$ 3,767 million from C$ 3,756 million in Q3 2021. The revenue rose to C$ 10,570 million from C$ 6,573 million for the same comparable period. The basic EPS jumped to C$ 6.52 from C$ 3.24. The dividend yield rose to 4.4 per cent to 3.2 per cent. The bank’s EPS is C$ 20.10 and reported its five-year dividend growth of 6.77 per cent.

On December 1, 2022, Bank of Montreal took over Radicle Group Inc.

Bottom Line

As an investor, have a long-term approach to stay relevant in the market. Additionally, portfolio diversification can be done to spread out the risk. It facilitates the investor to lower the risk and focus on wealth creation goals. Align your investment goals with your stock selection to make your portfolio risk-proof. Along with stock performances, assess the company valuations and financials to have a 360-degree view of the market.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.