Royal Bank (RY.TO)

Banks had a nice run but they all pulled back and didn’t really participate in the rally because of concerns on the Canadian housing market. 60% of their residential mortgage loan book is insured. The other 40% has a very long to valuation ratio of 47% so there is a lot of cushion built-in. Very nice diversified revenue stream. Personal and commercial lending is about half of their earnings. Yield of 4.19% which they continue to increase. Trading at about 11X forward earnings, which is very attractive.

Banks are a sector with a very rhythmic pattern. They did peak out when they were supposed and he did sell. You can buy banks back every summer about July or August. Look for a breakout from a consolidation level. He has been out of banks for a month and a half.

Doesn’t feel banks have reached a multiple level where they are overvalued. Growth is going to be muted and won’t be the same as we have seen over the last 2-3 years. All Canadian banks are still reasonable holdings and should be in everybody’s portfolio for a combination of steady growth and decent yield. With the Canadian tax credit, you have to favour Canadian banks over US banks if you are a Canadian shareholder.

Banks have had a big run and have lost momentum recently. Have been some concerns about Canadian economics that have been unfolding. They all reported pretty good numbers and have all had some dividend hikes. Feels they are fully valued. If you own, it doesn’t hurt to take a bit of money off the table.

The largest Canadian bank. Not a huge fan of the banking sector. Won’t show a huge amount of growth. With the government making sure there is not too much growth in the mortgage market there is a slowdown so domestic lending should be very weak. However, this one is particularly well-suited because of their money management, wholesale banking and being in the US. Not cheap.

He buys Canadian banks and just sits with them without selling.

Has not been buying it recently. They traditionally hold a significant valuation premium to others and it has disappeared to a great extent. They have done very smart things over the last few years. Cleaned up issues in the US and are a large player in capital markets and retail banks. Over 4% yield still and a relatively safe place to be.

Still sees a correction risk in the banks. They keep going higher. It is not his forte to buy in when something is as strong as this is. We should still get a correction. To be there now for dividends: ZWB-T. Get into RY on a pull back.

We are still in a strong time frame for banks. Relative Strength Index would suggest this has a bit more to run.

Possibly sell a little bit here or wait for a pullback to buy more. They still have growth in their business. Their numbers came out today and they were very, very good. Canadian banks manage their risks very well. Thinks they will rise their dividends.

Dividend stocks on Canada including banks are a little over stretched. Good yield, but she would take a few profits and put it in the US banks.

Likes this one but it has had a huge run. If you own, continue to hold and add on any weakness.

He is more focused on the US banks because there is more value there. The RY is bank on their model price. Others have upside to model price. Prefers NA-T

Not his favourite bank. You could probably go into this one now. Has sort of lagged over the last little while and he doesn’t think there will be a significant correction in the banks. They have corrected some of their problems.

Looking to Buy some Puts. What is your outlook for the next 6 months? He doesn’t use much in the way of options. Owns this bank and he likes it. Has had a marvellous run. If you are a trader, this might not be a bad time to take some profits, stand back and see where it is going from here. Likes it long-term.