RE:ALL 4 lifecos up again, while CAD banks struggle Scotiabank quantitative strategist Hugo Ste-Marie believes Canadian insurance stocks will continue to outperform he banks,
“The TSX insurance sector outperformed its TSX bank counterpart by more than 20 per cent over the past 12 months (up 15 per cent versus down 8.6 per cent) and by 38 per cent since June 2022. Still, our preference remains unchanged for now – we prefer Insurance. Not only are insurance stocks enjoying superior forward earnings momentum compared to banks, which helps them outperform, but, despite the large outperformance, Insurance remains more attractively valued than Banks. Unfortunately for the banks, the recent bounce has come with falling forward EPS, which has pushed the forward P/E ratio to 10.5 times (versus 9.5 times for the insurance sector). In addition, if the recent weakness in U.S. regional banks persists, it could weigh on the broader banking space in North America”