I'm not sure what the growth expectations are for stock price. What's your prediction?
We like both names. TMX is a $14.7B market cap that trades at 23X forward earnings, and most investors know it for its operations of the TSX and TSXV, which can act as a regulated toll road on the markets, but the biggest growth driver for X is its data analytics segment, particularly VettaFi. This is where ETF issuers can create a custom benchmark on VettaFi, and TMX earns an index licensing fee for every dollar of AUM in those ETFs. It is quite scalable, and we like the growth prospects here.
EFN is a high-quality compounder with a strong earnings growth track record. Forward expectations for earnings growth call for 14%, and analyst estimates have been trending higher. It trades at a 17X forward earnings multiple and it has a solid fundamental profile.
We would be comfortable owning both, and we might give EFN the slight edge for forward growth estimates, but we think X is the more well-rounded name.