Royal Bank (RY.TO)

Like TD, it's pressured by low interest rates. RY is the biggest Canadian bank and is well-run. Expect a 7-10% return this year (like last) including the yield. There are better opportunities elsewhere, but you're fine to keep holding it.

RY vs TD vs SLF? He owns both of the banks and he prefers this space over the insurance sector. RY has a stronger approach on the wealth management side, whereas TD focuses on retail customers and has a larger presence in the US. Right now he would favour TD. Canadian banks of been held back as of late because of a unwarranted fear about the housing market in Canada. Dividends with the banks are great too.

MFC vs. RY MFC shows a nice uptrend, but facing long-term resistance. It's overbought, so enter around $26 during a sell-off. RY's chart is moderately positive with short-term resistance around $110. Not much upside at the current $107. Enter at $102-103.

RY still gained 10% last year despite a sluggish year for Canadian banks. Not bad. They're well positioned in the US (23% of their revenues). Trades at 11x forward PE, a discount from their 10-year average. JPM trades at a higher multiple than RY. RY's earnings growth will be 5%, based on slow, moderate Canadian growth (though she doesn't see a Canadian recession). RY will continue to raise its dividend. (Analysts’ price target is $111.25)

CDN Bank shares or ETF? As a porfolio manager, he prefers to use his expertise to pick individual stocks. An ETF gives you the group and no ability to outperform. Canadian banks are favorable over US counterparts he thinks, including the higher yield. He likes BNS and RY. He does not hold much in TD at the moment. He holds about 20% of his portfolio in banks.

He's still bullish the Canadian banks, though capital appreciation will be tougher based on a weaker earnings outlook. Consumers have borrowed enough with net interest margins tightening. The banks are still good for income investors. RY pays a 4% yield and trades at an 11x PE, and pays a 2-3% earnings growth. Total return over 3-5 years he guesses around 68%. good dividend. Growth is slow, but he sees the banks as inexpensive utilities. BNS, then TD and RY offer the best value.

Will it ever split? Splitting is not a big factor for him. Over the years, the banks tend to split above $100. There's long been talk of CIBC splitting, but they haven't. He'd rather look at the company fundamentals. RY reports tomorrow.

RY vs. TD He owns more TD, like its American footprint and are getting out of online brokerages which has shrinking margins, so that was a good deal. Both are solid, but we'll see what their earnings are like. RY has 12x forward earnings, while the S&P is 17x--this means a safe margin.