3 Under-the-Radar Financial Stocks to Buy in September

Financial stocks have gained momentum in late August, which should spur you to snatch up equities like Laurentian Bank of Canada (TSX:LB).

| More on:
stock research, analyze data

Image source: Getty Images

The Canadian stock market is heavily weighted in financials. This makes bank earnings season a big stretch for TSX. Investors will be familiar with the usual suspects that include Royal Bank, the top bank and the largest stock on the TSX by market cap. However, investors may overlook other financial stocks that have been just as dependable over the past decade. Today, I want to look at three financial stocks worth snatching up in September. Let’s dive in.

Why financial stocks like Laurentian Bank are under the radar

Laurentian Bank (TSX:LB) is a Montreal-based regional bank. Its shares have climbed 35% in 2021 as of close on August 27. The stock is up 51% in the year-over-year period. Regional banks do not attract the attention of Canada’s Big Six. That is unfair, as these financial stocks often offer comparable capital growth, income, and stability.

The bank is set to release its third-quarter fiscal 2021 results on September 1. Laurentian Bank had just come out of a damaging mortgage underwriting dilemma when the pandemic hit. Fortunately, it has rebounded nicely in the first six months of this fiscal year. In Q2 2021, the bank reported adjusted net income of $56.7 million — up from $11.9 million in the prior year. Meanwhile, adjusted net earnings per share rose to $1.23 compared to $0.20 in Q2 2020.

Shares of this financial stock possess a favourable price-to-earnings (P/E) ratio of 11. Moreover, it offers a quarterly dividend of $0.40 per share. That represents a 3.7% yield.

This explosive stock made a smart bet on the crypto space

MOGO (TSX:MOGO)(NASDAQ:MOGO) is a Vancouver-based financial technology company. In August, I’d discussed why it was time for investors to jump back into Mogo stock. Its shares have increased 33% in the year-to-date period. The stock is down 5.1% month over month.

Fintech companies were forced to improvise in the 2010s, as big banks made huge investments in upgrading their digital offerings. Mogo dove headfirst into the crypto space in early 2018. That has paid off big time during the crypto bull run in 2020 and 2021. In Q2 2021, Mogo reported revenue growth of 29% to $13.7 million. Meanwhile, it delivered record gross profit of $12.1 million. It posted net income of $9.0 million, powered by a $24.9 million gain on its Coinsquare investment.

This is a financial stock has posted strong growth in recent years, rising 200% from the same period in 2020. It is worth holding over the course of this decade.

Here’s another financial stock to snag in the banking space

Canadian Western Bank (TSX:CWB) is another regional bank that I’d suggest holding for the long term. This financial stock has climbed 27% in the year-to-date period. Canadian Western Bank was a stock I’d recommended in May 2020.

The bank delivered its third-quarter 2021 results on August 27. Total revenue climbed 16% from the prior year to $263 million. It saw loans increase 9% to $32.3 billion and branch-raised deposits jumped 17% to $18.7 billion.

Shares of this financial stock last had a favourable P/E ratio of 11. It offers a quarterly dividend of $0.29 per share, which represents a 3.2% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Investing

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

Hourglass and stock price chart
Stock Market

It’s Not Too Late: Invest in These TSX Growth Stocks Now

Solid fundamentals of these top TSX growth stocks could help them maintain strong upward momentum in the years to come.

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

stocks climbing green bull market
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Don't ignore stocks just because they look like they're at a high price. Instead, see exactly why they've driven so…

Read more »

dividends can compound over time
Bank Stocks

Is TD Bank Stock a Buy for Its 5.2% Dividend Yield?

TD Bank stock offers a rare 5.2% dividend yield—can it rebound from challenges and reward contrarian investors? Here's what to…

Read more »

chart reflected in eyeglass lenses
Investing

How Should a Beginner Invest in Stocks? Start With This Index Fund

This Vanguard index fund is the perfect way to start a Canadian investment portfolio.

Read more »

analyze data
Bank Stocks

Is BMO Stock a Buy for its 4.7% Dividend Yield?

Bank of Montreal is up 20% since late August. Are more gains on the way?

Read more »