1 Canadian Stock I’d Buy Before the Next Rate Decision

Canada’s most recent rate decision likely wasn’t what Canadians were hoping for. On April 29, 2026, the Bank of Canada maintained its policy rate at 2.25%, keeping it steadily in place where it has been since October 2025, and marking the fourth pause.

Rate decisions can move the TSX fast, and if you’re worried that soon we’ll get another rate decision, then it could be time to look at companies that can grow whether rates stay high or finally move lower.

In that case, focus on lenders offering strong earnings growth, rising deposits, and expanding market share rather than traditional slow-growth banks. That’s why today we’re looking outside the Big Six to a different kind of bank.

EQB

Equitable Bank (TSX:EQB) has grown from a nickel lender to Canada’s seventh-largest bank by assets, with more than $136 billion in assets under management and administration (AUM). That’s helped the company continue to rise, with shares up 18% year to date, and about 30% in the last year alone.

Alternative banks like EQB stock can fit when looking at companies for safety in a volatile rate market. The bank focuses on residential lending, commercial lending, and digital banking, with deposits recently surpassing $10 billion!

In fact, EQB stock now serves more than 742,000 Canadians through its digital platform, and recently completed the acquisition of ACM Advisors in late 2024, expanding its alternative asset management business. As one of Canada’s fastest-growing financial institutions, now could be the time to latch on.

Into earnings

But do earnings back up the excitement? During Q1 2026, adjusted diluted earnings per share (EPS) came in at roughly $4.55, up about 11% year over year. Revenue reached approximately $344 million in the quarter, while loans under management climbed to roughly $134 billion and return on equity stayed strong around 15%.

EQB stock’s CET1 ratio sat near 13.8%, comfortably above the regulatory minimum, allowing it to continue expanding safely. In fact, EQB stock grew adjusted net income more than 20-fold over the last decade, with its dividend rising to $2.24 per share and yielding 1.8% at writing.

Yet despite all this growth, the company looks fairly valuable, trading at 1.4 times book value. And analysts still see upside due to the strong profitability and digital growth.

Looking ahead

So, if rates stay higher for longer, where does that leave EQB stock? The bank can benefit from strong spreads and disciplined underwriting, as digital banking growth gives the company lower operating costs compared to its branch-heavy peers.

What’s more, EQB stock targets double-digit EPS growth in the medium term, with commercial lending and insured mortgages remaining important growth engines. 

Of course, there are risks. Housing weakness could pressure loan growth, credit losses may rise if unemployment climbs, and smaller banks can see more volatility during economic stress. Yet EQB stock seems to have a setup that allows for fast growth even during that stress.

Bottom line

In short, EQB stock combines the growth investors love with the stability of a profitable Canadian bank. The next rate decision could become a catalyst either way, but EQB has positioned itself for both falling and steady-rate environments. And no matter what, there’s a solid dividend that can bring in ample income even with $7,000.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTEQB$121.6557$2.24$127.68Quarterly$6,934.05

So, while bigger banks often dominate headlines, EQB stock continues proving smaller Canadian financial stocks can deliver outsized growth and long-term returns.

The post 1 Canadian Stock I’d Buy Before the Next Rate Decision appeared first on The Motley Fool Canada.

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More reading

• A Smart Strategy to Use Your TFSA to Effectively Double Your $7,000 Contribution
• 2 Canadian Stocks to Buy if Mortgage Rates Stay High
• TFSA vs. RRSP: The Simple Rule Canadians Forget

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends EQB. The Motley Fool has a disclosure policy.