Royal Bank (RY.TO)

Banks. It is important to focus on the right groups. Wants strong cash flow, good balance sheets and strong dividend policy. RY fits all of this. Canadian banks are under performing US banks, which he prefers. Thinks you would do better in City Bank, but RY is a leader in Canada.

Likes the Canadian banks. (See Top Picks.)

(Market Call Minute) Great, solid long-term name. Not his favourite bank.

He is comfortable with this right now and it is one of his larger positions. Biggest company in the Index so you have to have a good reason not to own it. Earnings are recovering. Obviously good exposure to wealth management in Canada. Valuation is a little on the high end. Canadian banks have a premium valuation but thinks there is a lot more upside compared to some of the US banks right now. Dividends are north of 4%.

Banks still have room to grow their dividends and from a valuation perspective they are quite cheap relative to other sectors such as pipelines. This one is the most exposed to growth in the US and global investment banking is coming back. With Europe putting things more or less in place puts them on somewhat of a better platform. His favourite names would be this bank along with Toronto Dominion (TD-T).

(A Top Pick Sept 20/11. Up 24.93%.) Was trading at a discount to the other banks at that time. There are other banks he would prefer buying at this time.

(A Top Pick Sept 16/11. Up 4.28%.) Still likes.

As long as you see this trading above the 200 day moving average, around $54, it should be okay. He is not a big holder of Canadian banks.

Likes this bank but doesn’t believe you are going to get the global growth and explosive type of returns that you had many years ago. You are really looking for a dividend play here and a decent growth rate.

Had a great last quarter. There was a surprise dividend increase. Not overly expensive but would prefer National (NA-T), which he thinks is cheaper. Has recently trimmed his position in this bank and bought J.P. Morgan (JPM-N). With Cdn$ at these levels, you can take advantage of buying US banks. Also, feels US housing is in full-blown recovery where Cdn housing has already recovered and probably peaked.

(A Top Pick Sept 14/11. Up 25.85%.) Still likes the banks as a group. Reported very strong Canadian retail banking numbers this quarter. Raised their dividends.

Record earnings. Raised dividend. They all did. Likes international and financial services assets. Not as bad results as people thought. Looking ahead, RY is a core holding but he owns 4 of the big 5. Max 20% of bank in portfolio and RY is 5%.

Their wholesale banking should be quite strong on Thursday. High possibility they increase their dividend this week.

Doesn’t expect they will be one of the banks that increase their dividends this quarter. Expect this will be a modestly good quarter for domestic banking and this is one of the dominant forces in Canada. Not a compelling Buy at current levels. 4.2% dividend.

Will probably have a good quarter. Most are treading water. TD looks good. Most if not all will be increasing their dividends. Doesn’t expect RY to be a blockbuster from here – just the dividend increase. Aug 30 numbers come out and div increase could be announced then.