Q: Would you please give your evaluation of these 2 stocks and which would you recommend for a 3 to 5 year hold in a tfsa? Thanx.
5i Research Answer:
Both names are solid but we give preference to EFN today. PRMW is a stable dividend grower with a defensive business model where EPS is expected to expand significantly over the next three years. It is the largest scale industry player with an economicallly attractive business however does have some debt. EFN on the otherhand, offers more growth upside and provides investors with both industrials and financials exposure through its leasing activites. It has high debt due to these activities, but growth is high and it is increasingly becoming capital light as it expands its 'services' segement. We like EFN more here for growth, whie it is also much larger (market cap of $11B vs $3.5B), and pays a higher yield (1.76% vs 1.55%).