Bank of Nova Scotia (BNS.TO)

If looking for a place to go today, he might look at this because of their international exposure. If we are going into a better commodity cycle, given their south American exposure, this could do very well. Management has been sinking a lot of money into information technology, because there is a big competitive landscape out there.

It is 50% non-North American. They are looking to sell Thailand operations. They made an acquisition in Chile that looks quite good. He thinks they will catch up later in the year. You might get 10% total return.

Canada's 2nd largest bank and the most globally ambitious in terms of expansion. Earns about 14.5% ROE and grows earnings at about 7% compounded annually. Its expanding through a $2.9 billion acquisition of BBVA's Chile's franchise, which will catapult them into the #2 position in that market. Dividend yield of 3.9%. (Analysts' price target is $90.50.)

Never tell anyone to sell a bank. But he does not hold the banks. Over the long term they all ride the same wave. He thinks this one will benefit from the South American exposure. But lifecos will do better than Canadian banks.

This will probably have another dividend increase this year. You are likely to get 6%-9% dividend growth in the next 12 months. The banks haven't split their stocks in a while, and are getting up towards that magical $100 level. Stock splits don't matter in terms of valuation, it is really just a psychological thing.

(A Top Pick Dec 9/16. Up 11%.) Had thought the banks were a good deal because of a rebound in the economy in front of us. Also felt that this had the best mix at the time. They’re also trading at an attractive valuation. All these things are still there. Still a buy.

This sold off after the 4^th quarter. It’s a good stock. Low cost, domestic retail bank. There is good growth happening in Mexico and Latin America. They just announced a big acquisition in Chile, which he thinks will be accretive over the next 2-3 years. They’ll increase their dividend 5%-6% this year. Dividend yield of 3.9%. (Analysts’ price target is $90.50.)

This still has some good upside potential. It wouldn’t be his 1^st choice, but if he were holding it, he would continue to hold it.

Likes their exposure in the Caribbean, Mexico and South America. He has some concerns because of the Mexican situation, and sees NAFTA not being approved with a Mexican participation. Wouldn’t be a buyer at this time.

It has been a strong performer this year. It has outperformed the TSX in 18 of the last 25 years. They have a strong footprint in rapidly growing economies. It is a catalyst rich situation. It is just at its 200 day moving average where it has support. It is a perennial buy and hold. (Analysts’ target: $86.50).

(Market Call Minute.) Bank of Canada is raising rates. Margins are starting to increase. They’ll probably take a write down or hit with their Caribbean operations.

He likes all the Canadian banks at these prices and they are all looking attractive. Canadian banks trade at almost twice the yield of the US banks and at about a 1.5 multiple discount. Dividend yield of 4%. (Analysts’ price target is $86.50.)

Buy, Sell or Hold? The only Canadian bank he owns. He owns this because it has the smallest Canadian footprint and the largest non-Canadian footprint as a percentage of their assets, of the banks. It is mostly in emerging markets of south America and Asia, which are the growth markets. Dividend yield of 3.9%.

Hurricane impact? In the International segment, which represents just over 30% of their earnings, the Caribbean is actually quite small. The biggest exposure is Jamaica, which he doesn’t think was particularly hit. He wouldn’t be unduly concerned. He likes this bank very much at these levels.

Canadian banks do their best in the fourth quarter. They are all sort of off a bit so you should see some upside in the next 3-6 months. They are doing 12% growth in Latin America.