Canadian Imperial Bank of Commerce (CM.TO)

He's been watching this closely. His metrics show that last week that the market no longer trusts their balance sheet (the chart fell below previous support levels). Of the big five, this is the first to go into "blue".

Canadian banks very attractive. Currently trading at ~9x earnings. ~7% dividend yield is exceptional. Very strong wealth management business. Good for long term investors. Expecting double digit return going forward. 

Does have global operations, but more domestically inclined. Gained a lot of market share in the mortgage market, and that's where we might see an uptick in provisions at these rates. Yield is 6.8%.

As interest rates have gone up, yield stocks have been pushed down considerably. Sizeable mortgage exposure, so provisions for credit losses are attracting attention. Attractive here. Company is not going away. Expense ratio going down. Yield is 6.7%.

Likes preferred option with 8-9% yield. Owns shares in company - expecting recovery in next 5 years. ~7% yield is excellent yield. Owns shares and has been buying. 

All of the interest sensitives have been under pressure the last couple of months with rates rising.

He favours TD. Tightly regulated oligopoly, and a levered play on the growth of the Canadian, and increasingly US, economy. Surplus of excess capital. 10x earnings. Dominant personal and commercial banking franchise. Good-sized banking presence in the US. Shares are at a discount to average. Close to 5% yield, growing at 8% compound over 10 years.

Valuation and yield of SLF are similar to TD. But TD's competitive position in its industry is more advantageous than SLF.

Compared to CM, TD is more of a scale player with a stronger franchise on both sides of the border on its core banking business.

Has had a lot of issues over the years, but he thinks things have improved. At the end of the day, all the banks are starting to show increasing loan losses. 

Canadian banks are reasonably priced, but still headwinds on loan losses. He likes the one with the best balance sheet, TD. He also likes CM, with its outsized dividend yield and low valuation. BMO is OK.

For the heavy lifting in your portfolio, he'd look instead at insurance companies with similar yields and more growth over the next 1-2 years.

Cheap. 1.4-1.6x book value. Trades around 10x earnings. A great business. Tough time recently, partly due to what's happened with US banks. Higher rates increased costs, loan losses went up. Will be substantially higher 1-2 years from now. Yield is almost 6%.

CIBC has outperformed BNS year to date. Which stock is less bad (negative)? Do you want to hold any banks? He prefers insurance though he owns TD. Every banks has been down for a while. That said, these two banks have gone sideways since November. He prefers BMO, Royal or insurance.

Likes Canadian banks as a group, well capitalized. She doesn't own CM, as its domestic nature makes it more sensitive to mortgage market volatility. She favours TD and RY, with exposure to US growth. 

Around 65% of CBIC's loans have exposure to real estate, with 55% consumer and 10% commercial. CIBC's higher exposure to real estate does make it relatively riskier, and it is one of the smaller banks. Still, its valuation of less than 8X earnings reflects some, or even all, of this risk. We would still be comfortable owning the stock, but until recession fears go away or rates peak it may not do much.
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There'll be little disparity among the big banks though CM depends more on Canadian mortgages. Long-term, the big banks will pay you 10-15% returns annually, though they haven't been giving that in recent years. He prefers RY because of its slightly higher ROE and is more diversified.

Seen as most troubled Canadian bank. Regulatory scrutiny on balance sheet. Among the highest dividends. Prefers RY and TD for the stronger balance sheets. May have more downside, but don't be afraid of it.