Bank of Nova Scotia (BNS.TO)

(Top Pick Oct 2/14, Down 7.98%) They have one of the higher percentages of energy loan value compared to the others. They are getting more clientele through innovative marketing. The dividend and its growth are not in jeopardy. Tangerine is good for them. He is going to wait out the ups and down.

Canadian Banks got hit hard today. This one is 50% non-Canadian. In times like this, it is just like the oil story, where we have a little bit of irrational selling at the moment. Even if it’s Americans shorting them, they are indiscriminately shorting. This is cheap. Its diversification is Caribbean, Peru, Colombia, Mexico, Philippines and Thailand, and none of these are overly exposed to oil. This is a good entry point. (See Top Picks.)

A very commodity oriented bank. This is where you really want to take a 2^nd look at it. They have exposure to South America, Mexico and the Caribbean. These are areas that probably will suffer with the stronger US$.

Feels this is probably the best value in banks right now. He likes this because their Canadian domestic retail operations and wealth management are growing quite nicely. The integration of Tangerine is helping them along with cross-selling of wealth management and banking products. Likes the International side. It is more volatile, but a higher margin business. Dividend yield of 4.19%.

The whole sector pulled back in 2014 with energy and has been trying to consolidate. A lot is hinged to energy because they are a big part of our economy and that’s who they lend money to. Should energy hold at $50, which it seems to be doing, the symmetrical triangle is going to break out. Wait for the breakout to the upside, which would be a great play.

(Top Pick Jun 5/14, Down 4.16%) Many countries it operates in are in a recession. There has been a big US short thesis against Canadian banks, but it has not worked out that well. Americans don’t really understand the dynamics. He is not overweight Canadian banks. Now is not a bad time to buy them, however.

You could do a lot worse than owning this. Canadian banks are struggling a little on the earnings growth side right now. There was some changes on derivative trading in the last budget that are going to sneak up on them a little, but he doesn’t think that impacts this bank as much as some of the other players. They’ve had the better International strategy, so there are a few red flags, but he is comfortable with the Canadian banks.

Chart shows the peak at around $50 from 2007-2010, followed by a rebound bull, a small bear followed by a breakout. It is now showing a slight period of underperformance. Every investor should have 15%-20% in bank stocks, but he would just buy an ETF basket, such as ZEB-T.

Put it away and collect the dividend. Puerto Rico may have to default on its debt but that doesn’t affect BNS-T. It is a tremendous bank and less than 11 times expected earnings. Approaching 4.3% dividend. TD-T is the premier and is the safest.

He has a preference for US banks versus Canadian banks, because he thinks loan growth in the US is going to accelerate and there will be a bit of a slowdown in Canada. Also, the valuation is a lot more compelling today than it has been in the past. For the most part though, Canadian banks are great long-term investments.

She likes the banks although there are headwinds. BNS-T has a sizable international operation. She watches what is going on down there. The Canadian business performed very well. They had softer international revenues recently. They manage the extent of their international exposure.

This has materially underperformed the other banks since 2004. They have also underperformed on the international sector, but that is cyclical and temporary. When that comes back, you could see this bank take the lead again.

A Canadian bank with a safe dividend and some growth? He is invested in the Bank of Nova Scotia (BNS-T), Royal (RY-T) and Canadian Bank of Commerce (CM-T). The Commerce’s ROE is quite high relative to the other banks, and they do pay a very generous dividend. All the banks have different business models, and this one is primarily exposed in the Canadian market where the other 2 are more international. If looking for something with a balance between potential for capital appreciation and diversification of business mix, his choice would probably be Bank of Nova Scotia.

If you are building a portfolio of 15-20 names, this is a stock that makes sense. It has struggled lately, but so have pretty much all the Canadian banks.

The whole Canadian banking sector, on a price/earnings ratio, is not expensive. They all offer solid dividends. The Canadian economy is suffering somewhat and he thinks it will continue to suffer over the next couple of years. This is partly due to commodities and partly due to housing. Rising rates are going to hit Canada as some point in time. Bank earnings are going to be down possibly 10% over the next couple of years.