Royal Bank (RY.TO)

As a group, banks are cheap relative to the TSX. We have likely seen the highest water mark in terms of energy fears. This had solid performance in Canadian banking and wealth, and have the best earnings power. They are not going to grow much this year, but over the next couple of years he predicts some pretty good growth. Dividend yield of 4.06%.

This has gone up a lot, but a lot of that focus has been on their recent acquisition of City National of California and the fact that they are re-establishing a broader footprint in the US market again. They have a great retail franchise in Canada. Yields about 4.4%. (See Top Picks)

(A Top Pick March 21/16. Up 4.79%.) Canadian banks are great investments to have, but are slightly overvalued right now in terms of their growth prospects. Longer-term, they will give you that steady dividend growth and low single digit EPS.

Royal Bank (RY-T) or National Bank (NA-T)? This took quite a hit recently because of their acquisition. Not his favourite bank, but it is certainly in a zone that you could comfortably Buy in. He would buy both giving diversification of having a big bank with good dividends, and one that has better growth prospects.

This only has about a 5% exposure to the UK and Europe, which is manageable. They recently took over City National of California, which had a fantastic wealth management business in California and New York State. It is their intention to increase this business as much is possible, and at the same time cross-sell products and services. Dividend yield of 4.31%. (On his 3 top picks, he would not necessarily Buy now, but watch the markets for your entry point.)

Likes this and the Canadian banks. Over the long-term, anybody who has owned Canadian banks has earned significant compound rates of return. They are not expensive and you get a nice dividend growth. Dividend yield of 4.2%.

If Citigroup (C-N) was trading at the same valuation, it would be $90 a share. This is leveraged 22 to 1, while US banks are 12 to 1. Canadian banks, when you look at them worldwide, are the most expensive and the most leveraged. Who knows when this Canadian bubble pops?

Not his favourite, but a good bank. Thinks fintech is going to be a threat going forward. There are lots of small players and very niche, which means they can attack the bigger banks in a number of ways.

Despite the rally the banks have had, this is still attractive relative to historical valuations. There is still too much of a Short interest, and that is a catalyst. Thinks we have seen the high water mark of high energy fears. Unlike the other banks, had a very high quality beat on their Q2. Capital levels, which formerly were a little bit of an issue, have rebounded very briskly. He is seeing 6% EPS over the next couple of years. Dividend yield of 4.18%.

Trading at a very attractive valuation, just over 11X earnings. Price to Book is below 2X, which typically trades above 2X. Consistently generates an ROE in excess of 15%. Acquired City National last year which increases their US exposure. Like all the banks, this has been increasing its dividends. She expects earnings growth in the 5%-7% range. Dividend yield of about 4.2%.

S&P has downgraded this bank because of the size of their energy book. This one has the premier Canadian franchise, and also a more aggressive capital market wealth management. However, you can’t go wrong with a Canadian bank. Dividend yield of 4.08%.

He is bullish on financials. This one is coming back into a leadership role. A nudge in rates would be very positive for them. Their exposure to capital markets puts them into a good position if markets slowly improve. Consider US banks also, such as JPM-N.

Wealth management is the largest driver. They live and die with the Canadian economy. There will be on going dividend increases. They have some downside here and at that point you have the opportunity to step in.

(Market Call Minute) Part of a balanced portfolio. Make sure you have some Canadian banks in there. He has other Canadian banks in his portfolio.

Wait until after earnings in case low energy prices have trickled down? He likes the banks. Great dividends of around 4% and great opportunities to increase dividends by 5%-7%. Thinks concerns on bad loans due to oil prices is getting a little overdone. They have been setting money aside to deal with bad loans.