EQB & X: How have these banking stocks fared?

Kalkine Media - Summary

• The Canadian central bank is expected to increase its trendsetting rate is which could potentially benefit the banking sector.
• EQB Inc (TSX:EQB) provides residential and commercial real estate lending services and has a P/E ratio of 12.50x based on Thursday’s closing price of CA$ 69.38.
• TMX Group (TSX:X) Ltd. operates global exchange markets and clearing corporations and has a P/E ratio of 4.40x based on Thursday’s closing price of CA$ 29.31.

As the trendsetting rate is expected to increase, the banking sector could potentially gain from rising interest rates. While banking sector stocks are consistently income-producing stocks, they have seen volatility periods during recessionary times.

During early 2023, when recessionary fears took over the market, some of largest global banks collapsed. However, rising interest rates have brought forth the possibility of a revival in the banking sector. Apart from these factors, banking stocks also offer dividends.

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On that note, here are two TSX-listed banking sector stocks that investors can watch out:

h2 EQB Inc. (TSX: EQB)/h2 This banking sector stock provides residential and commercial real estate lending services and personal banking services as well.

EQB reported a revenue of CA$ 264.6 million on lending growth for Q1 2023. The ROE for the quarter was 16.9%, which exceeded the guidance of over 15%. Meanwhile the net income was CA$ 101.7 million in Q1 2023, a y-o-y growth of 10%.

During the announcement, EQB also announced an increase of 6% in its common dividend for Q2 2023 to CA$ 0.37 per common share.

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EQB has a market capitalization of CA$ 2.614 billion and a P/E ratio of 12.50x based on Thursday’s closing price of CA$ 69.38.

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h2 TMX Group Ltd. (TSX: X)/h2 The company operates global markets such as TSX, TSXV and other exchange and clearing corporations which provide financial services to the global community.

For Q1 2023, TMX Group reported record revenue of CA$ 299.1 million which was 4% higher than that in Q1 2022. The net income to common stockholders of TMX Group was CA$ 89 million for the quarter. Meanwhile the cash from operating activities was CA$ 96.6 million in Q1 2023, as against CA$78.7 million in Q1 2022.

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The group declared a dividend of CA$ 0.87 for the quarter.

TMX closed at CA$ 29.31 on Thursday June 29, 2023. The P/E ratio for X based on Thursday’s closing price is 4.40x.

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