There’s been a lot of doom and gloom around mortgages lately, with delinquencies rising off of post-pandemic lows…

… concentrated in Ontario and BC, which have seen the most exaggerated decline in home prices over the same period.

Within big bank loan books, that’s translated into some negative credit migration - but there’s no indication that risk isn’t contained…

… even if the trend continues, with an elevated mortgage renewal cycle set to last through most of 2027…

… that should have a mixed impact on consumer payments, skewing towards a step up - but not uniformly so. For the third of mortgages set to reprice higher…

… borrowers are likely to shop around, a second order effect that would benefit Dominion Lending Centres (DLCG), Canada’s leading broker network. The company clips a 7-8 bps fee on funded mortgage volume ($85B in 2025)…

… and an additional 4 bps from its in-house mortgage processing software, which has been rapidly adopted across its 9,000+ broker footprint.

These two levers create a credit-agnostic way to play the cycle, with incremental volume flowing through to margins…

… which the market is starting to price, with the stock up nearly 3x in the last three years and trading at a premium to its long-term average.

Badger Infrastructure (BDGI) ran 20% on the back of its Q1 results, which delivered near-20% organic growth…

… on broad-based end market demand, data centres in particular (now ~10% of top line) - which drove higher utilization across the company’s Hydrovac fleet and 11% Y/Y growth in revenue per truck.

To meet that demand, Badger is ramping production - adding 78 new units in Q1 and tightening its 2026 guide toward the upper end of the original 270-310 unit range…

… with management targeting a four-year payback and 20% after tax IRR on each truck, providing line of sight for BDGI to grow into its multiple and then some if it can continue to execute.

Fairfax Financial (FFH) shed 8% on the back of its Q1 earnings, which were down materially versus last year driven by some mark-to-market investment losses…

… and a smaller reserve release, with management calling out Q4 as the main period of actuarial reserve review.

While the main swing factors in Q1 look temporary, the underwriting environment could have some staying power - with slow-to-no growth in North America…

… being carried by double-digit growth in international, which has been a less profitable line of business for the company…

… though management expects underwriting economics to improve as the segment matures, supporting ROE and keeping a floor on the book value multiple.

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