The Canadian housing market has taken a major hit as the Bank of Canada has moved to aggressively hike the benchmark interest rate to combat inflation. Many investors have lost faith in the housing market in the near term, which has punished stocks with links to this space. Today, I want to discuss why I’m looking to snatch up a top housing stock that has been punished in 2022. Let’s jump in.
Home Capital (TSX:HCG) is a Toronto-based company that provides residential and non-residential mortgage lending, securitization of residential mortgage products, consumer lending, and credit card services. Shares of this housing stock have climbed 7.3% in 2022 as of mid-afternoon trading on November 29. The stock spiked earlier this month on news that it would be acquired by Smith Financial for $1.7 billion.
EQB (TSX:EQB) is another top alternative lender. Its shares have dropped 17% in 2022. The stock is down 24% in the year-over-year period.
This company unveiled its third quarter fiscal 2022 earnings on November 8. Assets under management (AUM) climbed 18% year-over-year to $47.3 billion. Meanwhile, it posted adjusted earnings of $82.1 million or $2.35 per diluted share – up 13% or 14% compared to the previous year. Adjusted earnings in the year-to-date period increased 11% to $236 million or $6.75 per diluted share.
Shares of this housing stock possess a very favourable price-to-earnings ratio of 6.8. In Q3 2022 it hiked its quarterly dividend to $0.33 per common share. That represents a 2.2% yield.
