In the last Number Cruncher, we analyzed companies with low earnings estimate dispersion over the next two quarters, aiming to identify resilient businesses with lower short-term risk.
Let’s start with Loblaws (L)
To evaluate Loblaws, we start with its scorecard, where Quality—a measure of underlying profitability—is the key metric. Loblaws scores 79 in Quality and 80 in Volatility, indicating strong performance and stability.
The Factor Tilt diagram provides additional context, highlighting recent consistency in both metrics through narrow spreads in the lighter bar segments, which represent one-year highs and lows. This signals steady performance over the past year.
Loblaws’ Quality score is based on its five-year average return on capital, the stability of that return, and its Economic Performance Index. Volatility is measured by the company’s two-year beta, Sharpe ratio, and one-year maximum drawdown.
Together, these factors point to a high-quality, low-volatility profile—an attractive combination for investors seeking resilience and lower risk, especially in uncertain markets.
Sun Life Financial Inc (SLF)
Following the same approach as with Loblaws, we begin by examining Sun Life’s metrics. The company scores 72 on the quality metric and 70 on volatility, with a particularly notable yield score of 62. To better understand these factors, we turn to CPMS’ comparative performance indicators, shown just before the factor tilt diagram.
These indicators highlight how Sun Life compares to both its sector and the broader market. In particular, the volatility and yield categories stand out, with high relative scores marked by green bars.
In terms of yield, Sun Life offers an attractive dividend of 3.8%, supported by a strong four-year average dividend rate of 3.94% and a dividend stability score of 10.16%. These metrics, along with the spread of green bars, indicate that Sun Life outperforms the market in this area, making it appealing to income-focused investors.
Dollarama is characterized by strong growth and quality metrics, while offering relatively low dividend yield and limited value appeal. Its stock strategy score is high at 88, reflecting a solid performance trend, and the recommendation is to hold. Overall, Dollarama stands out as a high-quality growth stock with stable fundamentals and consistent financial performance.
