Lyle SteinEquitable GroupEQB.TOPAST TOP PICKMay 09, 2017

Very good business for investors. Return on equity very high. Strong management team. Consistent growth for the past 20 years. Only concern is that credit cycle will tighten and make it harder to perform. 

Are very well-managed. Are exposed to insurance, too. He's been wanting to buy this for years, but the price keeps running away from him. Trades at 1.3x book and 9.5x PE. Doesn't pay a big dividend, because they reinvest into the company, which is good.

Good, but is less diversified than the Canadian banks. Also, he fears the real estate market will hit a bigger snag than many believe, and that would impact EQB earnings (through mortgages).

Great company, alternative lender, very well managed. Though stock's not that expensive, he's waiting for a pullback. Rising rates haven't slowed the mortgage market to a significant enough degree to impact the share price.

It is very well managed and has a high ROE. There are risks in the sector with a real estate slowdown. Still not priced low enough yet, so wait.

One of the criteria we used is Total long-term debt to Total Equity less than 1.5x, and EQB does not meet those criteria. 
However, we think EQB’s capital base is good, growth has been strong recently. 
We like EQB and would be comfortable holding it for the long term. 
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. 10-year ROE average of 16.6%. More than 340,000 customers. Recent acquisition of Concentra Bank. Strong balance sheet and valuation. Unlock Premium - Try 5i Free

He thinks this mortgage lender has a dividend that is growing and trades at a low PE ratio. It is not a low risk company, as it makes loans to non-conventional borrowers. At this point in the market cycle, with high consumer debt, he would prefer to own a bank with larger market cap and higher liquidity. Yield 1.5%.