3 Disruptive Canadian Fintech Firms Revolutionizing the Financial Sector
Posted by Adam Othman at The Motley Fool Canada
The Canadian technology industry is the most innovative sector of its economy. It generates approximately $96 billion per year and constitutes 5.1% of the total economy. Technology has become integrated into every aspect of our lives, from communication to transactions with others. Of the several sub-sectors of the Canadian technology industry, the fintech area presents itself as one of the fastest growing markets.
Fintech companies are often called “disruptors” in the financial sector, primarily because they use technology to improve how we do business with each other. The top fintech stocks represents the future of the financial industry.
Within this niche area, several types of fintech stocks are making a positive change in the financial services landscape. Today we’re going to look at three stocks to keep on your radar if you want to get into the fintech space.
Now way (TSX:NVEI) is a global payments technology company with a market cap of $6.01 billion. Headquartered in Montreal, Nuvei provides businesses worldwide with deposit and withdrawal options, allowing them to accept payments with nearly 600 alternative payment methods.
After the meltdown of the technology sector, the Nuvei share lost considerable value on the stock market. At the time of writing, it is trading at $43.46 per share, down 74.70% from its September 2021 record. At around seven times price to sales, Nuvei stock no longer seems overvalued. Having said that, the Nuvei share’s performance on the stock market is still volatile.
It might be worth waiting on the sidelines for another quarter to see if it might be a viable addition to your portfolio.
Propel Holdings (TSX:PRL) is a $251.37 million market cap stock that operates in the Canadian fintech sector under the CreditFresh and MoneyKey brands.
It offers customers an online loan platform, which gives those with bad credit an opportunity to borrow money. When people cannot secure loans from traditional lenders, they can secure lines of credit and installment loans through Propel Holdings’ platform.
It became a publicly traded company in the latter part of 2021, and rose by 35% between October 22 and November 12, 2021. Since then, share prices have fallen. At the time of writing, it is trading at $7.34 per share, down nearly 50% from its November 2021 record. Despite the stock market decline, Propel’s revenue growth and profitability have accelerated over the past two years.
Having reported an 82% year-over-year increase in revenue for the third quarter (Q3) of fiscal 2022, it appears well-positioned to deliver stellar wealth growth. As it prepares to launch another consumer credit quarter in Q4 2022, it’s an exciting stock to watch this year.
Mogo (TSX:MOGO) is another major disruptor in the Canadian financial sector. The $77.97 million fintech company headquartered in Vancouver also offers lending services. It offers high-interest loans to borrowers who cannot secure loans through traditional lenders.
Mogo has three primary services: Mogocard, Moka and MogoMortgage. Mogocard is a credit card that comes with a budgeting app to help customers avoid overspending. Moka offers a practical and intuitive investment platform. MogoMortgage helps home buyers find the best mortgage rates in their area.
At the time of writing, Mogo stock is trading at $1.04 per share, down 92.78% from its March 2021 record high. Collectively, the company’s platforms are helping many people with their personal finances. It could be an excellent long-term business if it continues to perform well in this area, despite the current challenges facing the wider technology sector.
Despite all the excitement fintech stocks offer for stock market investors, it’s important to remember that they belong to the technology sector. Fintech stocks provide better returns when the market environment is favorable technology stocks.
With rising interest rates and the threat of a recession looming overhead, investing in this area poses a significant degree of capital risk. If you have a well-balanced portfolio and a high risk tolerance, consider investing in these fintech stocks.
The post 3 Disruptive Canadian Fintech Firms Revolutionizing the Financial Sector appeared first on The Motley Fool Canada.
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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei and Propel. The Motley Fool has a disclosure policy.