Bank of Nova Scotia (BNS.TO)

Continues to buy it today for new clients. People are worried about the Latin-American exposure so it is flat at the moment.

Canadian banks have had a great run since the financial crisis. Canadian housing sector, which has been a big driver of these companies, is slowing down somewhat. Wouldn’t be buying, but if he owned, he wouldn’t be selling here.

Very nice ROE. If he were projecting most of the banks out a year from now and looking at balance sheet growth, he would see 10%-15% in dividends across the board. If we get some valuation increase (price to book), the numbers could be better than that.

He is very positive on the banks. Thinks it will continue to increase the dividend and will experience increased capital growth.

Doesn’t know that we are going to run away with banks in the next few months so there is no rush to own. Has some resistance at about $60. If you want to buy some, your downside would be limited. It is above its 50 and 200 day moving averages on a yearly basis. He would rather add at $62 and above.

Toronto Dominion (TD-T) is up 90%, Bank of Nova Scotia (BNS-T) is up 54%, Canadian Imperial (CM-T) is up 14% and Bank of Montréal (BMO-T) is up 13% in the last 9 years. Why would TD and BNS rise that much more than the others? The 2 or 3 key points about these 2 banks is that they are the ones that are growing or expected to grow their dividends the quickest. TD is expected to grow by 10% per year over the next several years and Scotia is expected to grow by 9%-10%. Feels that TD is quite overbought at this point.

The only Canadian bank he owns. Has the smallest Canadian footprint of the 6 majors. Likes its international exposure, mostly Latin America and Asia. Thinks there are headwinds in the Canadian market. Has strong wealth management and trading business in Canada. Yield of 4.22%.

Canadian banks still occupy that space in the world where they are generally regarded as high quality, cautious, harmless and kept in check. In this bank’s case you’ve got the dynamics of a very, very big successful involvement and expertise in Latin American countries. This is a long-term hold.

Likes all the Canadian banks. Just reported beating earnings and just increased their dividends. If you want global exposure beyond the US, this is a way to go. If you want US exposure through Canadian banks, this would clearly be Toronto Dominion (TD-T) and Bank of Montréal (BMO-T). Royal Bank (RY-T) is also an interesting way to go. (See Top Picks.)

This is the only bank that he holds and he likes it for the international exposure. Longer-term, international areas is the place you want to be.

This is on a down swing. His feeling is that banks in general will swing down over the next month or two and in another month or 2 it might be a good entry point.

Thinks Canadian banks are all great long-term investments but we are at different stages in the cycle right now. The best time to own the banks is coming out of a trough, which is when they bounce the best. The worst time to own the banks is towards the end of an economic cycle. On a short-term view, he would be lighter on financials.

Hasn’t done as well, performance wise, as 2 of his other holdings, Toronto Dominion (TD-T) and Royal (RY-T) which is why he has put this on as a Buy. They keep their costs in line in Canada and the money they produced in Canada from retail they have invested well by going more into wealth management and international side. Their international business is more volatile but has higher margins.

Hasn’t done much over the last 3 years. They are an economy stock. Likes this one because of central American exposure. Thinks they are one of the chartered banks that will perform better. One of the safer banks.

30% less volatile than the TSX Composite Index. If you have a 10-15 year time horizon, you should be just fine. Near-term, he has some concerns about the Canadian banks. His focus has been buying US banks, particularly because they represent better relative value but, more importantly, he feels the Canadian consumer is highly leveraged.