Royal Bank (RY.TO)

Rotated out of TD and into RY with its strong wealth management, giving their portfolio the needed US exposure.

Owns and likes.

CM is taking less on credit provisions than other banks. Positive: credit situation better than others. Negative: taking more risk and, if wrong, stock would be penalized. CM is Canada-centric. Exposed to residential mortgages and commercial real estate in Canada; two iffy sectors, but doing better than expected. Good earnings and good asset management. 

Don't sell CM. Trades more cheaply than RY. RY commands a premium price for a premium asset.

A good company, but is ahead of itself now. Canada has low interest rates and a weak economy, and yet bank shares have been rallying aggressively. Wouldn't be surprised if this pulled back, but he likes this long term.

Nothing has gone wrong for them. The HSBC merger closed last March and will synergize nicely. RY trades at a premium PE and yields 3.2%. She likes their capital markets business, half in the U.S, which could increase in 2025.

Can't go wrong buying this one. One of his favourites in the space, along with BMO.

He's never owned gold. The price of gold over 30 years vs. prices of RY that period: RY has massively outperformed gold over that time. Despite gold's rally recently, it actually lags many stocks historically.

Bank valuations are at high end of traditional range. Concerned about earnings growth going forward. Canadian economy has issues. US expansion may be more limited for a while.

Would prefer over TD bank. Excellent business that is rock sold. Very strong balance sheet. Excellent brand name in Canada. 

If you're in a bull market, you want to own the strongest stocks you can find. He prefers "good, getting better", some kind of positive change that could add to the valuation, and where other people agree with him. He owns RY, CM, and NA; firing on all cylinders.

Offers consistent returns and diverse financial services. They have great leadership and stability. Prefers this to TD overall, though TD has a better valuation and potential upside (with many caveats--she her comments under TD).

It's stable. Good managers. Net interest margins are lighter than their peers, but this is offset by a lower net charge-off ratio, reflecting a high quality loan book. So they can leverage their balance sheet to boost earnings and ROE. Last year's selloff was irrational, so RY stock was ripe for a bounce-back. But shares are high now and he'd look elsewhere. $150 is a good entry point. It's not overvalued at 14x forward, though it's high and pricing in future upside. Shares are due for a breather.

Don't sell here, no reason to get off the train. Good things going on. 

RY is certainly he leader in terms of size amongst the big Canadian bank stocks. NA has actually outperformed over numerous time periods, but over a three year timeframe, RY has been number 1. We would not say it is too late to purchase. Bank stocks and in particular RY have done a great job of returning capital to shareholders through dividend growth over recent years acting as relatively low risk investments. At 14x forward earnings, we think it is buyable.
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Loves the Canadian banks long term. His favourites are NA and RY right now.