National Bank of Canada (NA.TO)

Canadian Banks look fine. Thinks there is some growth there, but not robust growth going forward, especially given where we are in the cycle in terms of real estate. He would choose the insurers over the banks.

Stock vs. Stock. CM-T vs. NA-T. Has outperformed by CM-T. Have a lot less volatility in their earnings. We are in a late stage market so he would prefer this.

A good bank. Their last quarter surprised on the upside, primarily because of capital markets.

A highly rated bank. Street consensus is that it is overvalued. He has three other banks.

Consolidated in 2011-2013, along with the other banks. Broke out very nicely last year and consolidated in the latter part of 2013 and into 2014. Has now broken out and is making new highs. Buy during its consolidation. Nothing wrong with the stock.

It is at the bottom of his list of what he would be buying in the financials. Issues with the wealth management side, which is going to be huge for all banks going forward. Switch into another bank. TD-T BNS-T, RY-T are preferences.

This is his preferred bank. They are making aggressive changes to try and fix their image. Acquiring the institutional business from TD Waterhouse was a brilliant move. He can see dividend increases twice a year for as far as the eye can see.3.99% dividend yield.

All the banks had a decent run, but this one has lagged and is still cheaper than the rest. Getting a discount multiple. Have been penalized because of negative views on their capital market activities, but mostly because they have been more of a regional bank than a national one. Feels they are getting around this. He is comfortable with the valuation, growth, and amongst the top 6 banks this would be his favourite in terms of relative potential returns. 4% dividend.

A great bank, but doesn’t own this any more. Based in Quebec and has the majority of its business in Quebec. Tends to sell at a discount to other banks, which helped him to do better than with other banks. He also got a better yield out of it because of that. If you think there are going to be headwinds coming up in the Canadian banking system, it doesn’t look as good as others. 4% dividend yield.

Canadian banks have done phenomenally well. From a seasonal perspective, financials tend to do well into the first half of the year. Canadian financials can track the market higher from October through to December, but this is not as significant as the one in March and April. We are technically in the off-season right now.

This is the one bank that would rank the highest in his process. Has performed well and continues to do so. Made some acquisitions on the capital market side recently, which continues to drive earnings for them. Also, they don’t have much of a penetration in the west, which is something they could potentially do down the road. A good holding.

Stock is quite cheap. Has been banging up against some pretty stiff technical resistance, but has now broken through. He is hoping that it will catch up with some of the other banks. Yield of 3.92%.

Switched his holdings to Bank of Nova Scotia (BNS-T) about a year ago because he wanted exposure outside of Canada. Corporate governance has held up fine, but he wonders how much more growth is ahead of us. The story for all Canadian banks is generally about how much leverage the average Canadian has. It is starting to approach nosebleed level. Any growth is going to be driven off higher interest rates so he would consider European and US banks, which are cheaper.

Trades at a discount to the rest of the banks because it is considered more of a Quebec bank. They have done a lot of acquisitions in the last little while. It will never give you the full multiple that all the other banks give you. Feels there are better growth opportunities in Toronto Dominion (TD-T) or Royal (RY-T), but you are fine to own this one. 4.2% dividend yield.

This has been one of the best performing banks since 2003. They know what they are doing. Has a very high quality focus on wealth management, personal and commercial. Incredible operations. There is lots of room for them to grow outside of Quebec. 4.2% dividend, which he thinks will go up every year with two increases every year for the next few years.