Q: Hi 5i
I've held EQB for quite a while now and I'm nicely ahead, in a registered account.
I wonder though if it's reaching its peak based on its fundamentals, or if it might still gain meaningfully if and when interest rates start to decline?
The dividend is relatively minor and if notable capital appreciation isn't reasonably in the cards, I don't know that it makes sense for me to hold on any longer.
Can you give me your opinion as to what the next year or two might hold for EQB, as and if rates decline.
Thanks 5i, much appreciated.
Peter
I've held EQB for quite a while now and I'm nicely ahead, in a registered account.
I wonder though if it's reaching its peak based on its fundamentals, or if it might still gain meaningfully if and when interest rates start to decline?
The dividend is relatively minor and if notable capital appreciation isn't reasonably in the cards, I don't know that it makes sense for me to hold on any longer.
Can you give me your opinion as to what the next year or two might hold for EQB, as and if rates decline.
Thanks 5i, much appreciated.
Peter
5i Research Answer:
EQB hit a new all-time high recently over the past few months, after roughly two years of sideways price action. On a long-term basis, it has been in an uptrend since inception, and it continues to trade at a cheap valuation of 7.5X forward earnings. It pays a small dividend of 1.9%, but sales and earnings growth are expected to be quite strong in the coming years, and the company has demonstrated its ability to generate and maintain strong margin levels. We would be comfortable holding this name for a long-term holding, and historically, even in declining rate environments, it has performed well.