Opinions
Barry Schwartz
National Bank of Canada
NA-T
WEAK BUY
Mar 03, 2025
Stock price when the opinion was issued
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Despite its expected growth, National remains cheap. It trades at 12.16x PE, compared to TD's 17.6x and Royal's 15.82x. True, NA's 3.13% dividend yield falls short of, say, BMO's 4.62%, but the projected growth makes up for this. Another plus is that National has no exposure to office real estate in the U.S., and only 8% exposure in commercial real estate there. Most of the bank's assets and operations lie in Canada. NA-T is a buy and hold.
Overall, banks should be correcting a little more than they are now. He sees some growth risks in Canada specifically. A bank like this, that's mostly exposed to the Canadian consumer and market, will have a bit of a correction if our economy is weaker.
Likes the name, but he'd wait for more of a drop before putting in new $$, perhaps another $10 lower.
If only he could roll back the time machine on his portfolio.... The bank that grew up and took a well-deserved seat at the big boys' table. Exceptional bank, packs a big punch in capital markets. Standout results. Purchase of CWB is a hand-in-glove fit, strategically sound, likely accretive. Lots of blue sky ahead, no qualms adding.
Likes it in general. Great platform and franchise. If economy is heading for a contraction (for whatever reason), this name doesn't have the geographic exposure of the other 5 banks. Mainly in Quebec; very small US and international footprint. Extremely good job of growing, so he wouldn't bet against management. It's a macro call.
Disclosure: his dealer custody is with NA.
In his opinion, the only quality banks in Canada are RY and NA. Best run for decades. He's not a huge bull on the Canadian banks, but this is one of the two names he'd buy.