Propel Holdings shares: a fintech that’s turning into a bank
Propel Holdings is a $980 million Canadian fintech stock on the cusp of a major transformation. In December 2025, it received regulatory approval in Puerto Rico to launch Propel Bank, a fully licensed international financial entity. The move, which will become operational in the first half of 2026, transforms the credit services company from an alternative lender into a fintech with a recognized banking institution, allowing it to offer mainstream banking services and expand into new markets, including the United States.
This strategic shift comes despite a puzzling disconnect in 2025. The company posted record third-quarter revenue, boasted 30% year-over-year growth and raised its dividend for the ninth consecutive time since May 2023. Yet the shares posted a negative 30% total return this year due to general macroeconomic fears. This disparity could pave the way for a convincing recovery in the new year.
New investors can now buy higher yields on higher growth stocks in early 2026 at a lower price than before. The latest dividend yields 3% annually and remains amply covered by profits.
Propel Holdings stock is entering the new year with positive momentum, including a gain of 24.2% over the past month. The new banking license is a game changer. Coupled with a partnership with Column announced in November to expand access to U.S. credit, the company is positioned for a lower cost of capital and potentially greater margins.
Propel shares, trading at a price-to-earnings (P/E) ratio of 10.3, represent a classic growth-at-a-reasonable-price (GARP) opportunity for investors looking ahead to 2026 and beyond.
Hammond power solutions
The Hammond Power Solutions stock is an excellent performer, delivering an astonishing total return of over 2,100% over the past five years. The $1.9 billion company’s strong growth is fueled by surging demand for its transformers and electrification products as global grids modernize. While impressive sales and earnings growth have slowed recently, powerful catalysts are lined up for 2026.
The company’s newly built factory in Mexico will increase production, free up margins and meet robust demand next year. This demand is being driven by the modernization of the North American power grid and, crucially, by the increase in data center construction, driven by investments in artificial intelligence (AI) infrastructure.
With a backlog growing 53% this quarter, Hammond Power will convert more large orders into revenue in 2026. Significant data center projects in the fourth quarter have strengthened this backlog and most deliveries will occur in the new year.
The stock, which trades at a forward price-to-earnings ratio of 19.9 and a PEG ratio of 0.8, appears undervalued given its strong earnings growth potential, making it an attractive entry into the ongoing electrification megatrend.
Takeaway for investors
The journeys of Propel Holdings and Hammond Power Solutions highlight the transformative potential within the small-cap universe. Propel’s strategic evolution into a bank and Hammond’s central role in driving a digitalizing economy provide clear and distinct paths to revenue, profit and share price growth in the year ahead.
Although small-cap investments generally involve higher volatility, they offer a unique opportunity to invest early in fundamental growth stories. Investors with a longer-term horizon and appropriate risk tolerances can buy these two growth stocks for the new year.
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