Equitable Group Inc. Reports First-Quarter Earnings and Hikes Dividend
Canadian financial services company Equitable Group Inc. (TSE:EQB) reported earnings and raised its dividend again. However, the highlight was actually one of its new initiatives.
On May 12, Equitable Group released its earnings for the first quarter of 2016. Net income slipped five percent year-over-year to $28.0 million, while diluted earnings per share dropped six percent to $1.71. (Source: “Equitable Group Reports First Quarter 2016 Results, Updates Investors on Successful Launch of EQ Bank and Increases Dividend,” Equitable Group Inc., May 12, 2016.)
However, the bottom line did not tell the whole story. In the first quarter, the bank’s mortgages under management surged 22% year-over-year to $17.7 billion. At the same time, originations increased 26% to a first-quarter record of $1.6 billion.
Part of the reason why financial results weren’t so great in the quarter was due to marketing investments supporting the launch of EQ Bank, the company’s new digital banking initiative.
EQ Bank was launched on January 14 with the first product being the “EQ Bank Savings Plus Account.” The account allows customers to pay bills, transfer money, and earn an interest rate of three percent. (Source: “Equitable Bank Launches EQ Bank,” Equitable Group Inc., January 14, 2016.)
So far, the company’s digital banking initiative has worked out great. By the end of the first quarter, the digital offering had attracted more than 17,000 customers and raised $794 million.
Moreover, Equitable Group also got a boost from its single family lending segment: “We substantially increased the Bank’s presence in Canada’s prime single family lending market, originated a first quarter record $674.0 million of alternative single family mortgages, and continued to outperform all of Canada’s Big Six in credit metrics,” said Equitable’s president and CEO, Andrew Moor. (Source: “Equitable Group Reports First Quarter 2016 Results, Updates Investors on Successful Launch of EQ Bank and Increases Dividend,” Equitable Group Inc., May 12, 2016.)
For income investors, the bank has good news. It announced a five-percent increase to its quarterly dividend to $0.21. That translates to an annual yield of approximately 1.48% based on Thursday’s closing price. Note that Equitable Group has increased its annual dividend for five consecutive years now.
Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners
Sign up to receive our FREE Income Investors newsletter along with our special offers and get our FREE report:
5 Dividend Stocks to Own Forever
This is an entirely free service. No credit card required. You can opt-out at anytime.
We hate spam as much as you do.