The Up and Coming Financial Companies
There are several small financial companies that are less (only slightly less) than 1$ billion in market capitalization;they sell funds and mutual funds and offer some financial brokerage services.The 3 main ones are Fiera Capital,Guardian Capital and AGF Finance.They are competitive and all trying to reach the billion dollar mark.One of these is Fiera Capital and it just reported it's second quarter results.This blog finds them to be an alternative to Canadian banks and insurance companies.
By the Numbers
Fiera Capital (FSZ) has a market capitalization of about $1 billion and assets of $1.2 billion.It has assets under management (AUM) of $125 billion which is a 15% increase over Q2 2016.Recently it lowered it's management fee to $.85% from 1.0% and this helped it's revenues grow by 46% over Q2 2016 from $75 million to $109 million.Adjusted EBITDA was $.35 per share or $29 million;this compares to $.32 per share in 2016,a 10% increase.
Investors are less interested in these numbers as they are with the fact that the dividend has been increased to $.18 per share.This is rewarding as their yield is now 4.84% which is quite healthy in comparison to the banks. But now this has raised their payout ratio to 229%.In addition, their price/earnings ratio is 109 in comparison to an industry average of about 12 times earnings.However investors like what they see as the price has gone from $13.50 in February to the present $15.00 per share.
The Other Guys
All 3 offer a good alternative to the banks.For example, if you look at stability the beta for FSZ is 1.35 and for AGF is 1.64 while the beta for Royal Bank is 1.1.Guardian has a low yield at 1.6% and less growth than the other two.Fiera has an excellent growth path and a good yield but it is pricey at 109 times earnings.However higher growth companies often have a higher P/E ratio.Nevertheless this blog prefers AGF Financial with a conservative price/earnings ratio and a yield bigger than most banks.It's growth has been average in 2016 but we will see how it has done recently as it reports third quarter earnings on September 27. use Blogdaleupsome for analysis of junior financials use Blogdaleupsome for analysis of Cdn. financials
By the Numbers
Fiera Capital (FSZ) has a market capitalization of about $1 billion and assets of $1.2 billion.It has assets under management (AUM) of $125 billion which is a 15% increase over Q2 2016.Recently it lowered it's management fee to $.85% from 1.0% and this helped it's revenues grow by 46% over Q2 2016 from $75 million to $109 million.Adjusted EBITDA was $.35 per share or $29 million;this compares to $.32 per share in 2016,a 10% increase.
Investors are less interested in these numbers as they are with the fact that the dividend has been increased to $.18 per share.This is rewarding as their yield is now 4.84% which is quite healthy in comparison to the banks. But now this has raised their payout ratio to 229%.In addition, their price/earnings ratio is 109 in comparison to an industry average of about 12 times earnings.However investors like what they see as the price has gone from $13.50 in February to the present $15.00 per share.
The Other Guys
FSZ does have competition;the chief competitiors are AGF Finance and Guardian Capital.Both are mutual funds distributors with some financial brokerage services and have about the same market capitalization as Fiera Capital.Fiera Capital has more growth but but both Guardian and AGF have a little more solid numbers.AGF has e.p.s of $.53 for 2016 and pays a dividend of $.32 per share.It's payout ratio is only 60% and it's price/earnings ratio is just above 13 times which is well below Fiera's at 109 times.It's yield is 4.1% and is slightly below that of Fiera;both are better than the banks.And it reports it's third quarter results on September 27.
Guardian Capital has a smaller yield but a conservative price/earnings ratio at 13 times.It has had good price movement since January and now trades at about $25 per share.
Hard to Choose
All 3 offer a good alternative to the banks.For example, if you look at stability the beta for FSZ is 1.35 and for AGF is 1.64 while the beta for Royal Bank is 1.1.Guardian has a low yield at 1.6% and less growth than the other two.Fiera has an excellent growth path and a good yield but it is pricey at 109 times earnings.However higher growth companies often have a higher P/E ratio.Nevertheless this blog prefers AGF Financial with a conservative price/earnings ratio and a yield bigger than most banks.It's growth has been average in 2016 but we will see how it has done recently as it reports third quarter earnings on September 27. use Blogdaleupsome for analysis of junior financials use Blogdaleupsome for analysis of Cdn. financials 
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