Equitable Group Inc. (TSX:EQB) stock rose another 3.31% on November 15. Shares are up 12.2% over the past month. The company released its third-quarter results on November 8.
Diluted earnings per share rose 27% year-over-year to $2.80 on the back of strong lending in Q3. Single Family Lending mortgage principal climbed 13% to $10.2 billion and Commercial Lending mortgage principal increased 27% to $3.6 billion.
Deposits surged 23% to $12.9 billion as the EQ Bank grew its deposits to $2.1 billion – a 31% increase from the prior year.
The board of directors also increased Equitable Group’s dividend payout by 4% from August 2018 to $0.28 per share. This represents a 1.5% yield.
These earnings were the best in Equitable Group’s history. Alternative lenders were put into a difficult spot in early 2018 after the OSFI introduced new mortgage rules that would include a stress test for uninsured buyers.
According to recent estimates from Mortgage Professionals Canada, this has frozen out over 100,000 potential buyers from the market.
As a result of these changes, Equitable Group had projected portfolio growth in Alternate Single Family lending between 2% and 4%. After this most recent quarter Equitable Group is now projecting growth between 11% and 13%, a stunning reversal after prospects seemed dim to start the year.
This is a great sign going forward as Canada’s housing market looks more balanced to finish 2018.
Equitable Group is a good bet to test its all-time highs before 2018 comes to an end.
