Q: Thinking of adding one of these to my TFSA. Which offers more growth and what would be a fair entry price?
Thank you for your steady support through these trying times.
Donna
Thank you for your steady support through these trying times.
Donna
5i Research Answer:
With the goal of growth in mind, we would prefer EQB over TD. EQB is much smaller ($2.0B market cap) vs. TD at $113B, and has grown its sales at a faster pace - 15% annually over a 10 year horizon vs. 7% annually, respectively. EQB has a slightly better net profit margin than TD, at 34% and 30%, respectively, and trades at a cheaper valuation of 6.4X forward P/E (vs. TD at 9.6X). TD offers a better yield, but for growth we would prefer EQB. We feel that around the ~$65 range is a good entry price, although, we like its recent momentum and would be comfortable stepping in here.