Toronto-Dominion Bank (TD.TO)

Very well run. Typically doesn't trade at a discount to peers, but it is today. Massive excess capital from failed acquisition gives it lots of levers to pull in a difficult environment. Over the medium term, good upside on multiple and earnings. Yield is 4.81%.

A top pick last month. Shares are attractive. Likes the banks. The overhang of the First Horizon cancelled deal resulted in TD holding a lot of capital. TD will expand more in the US, and maybe buy another company. TD will focus on Canada as immigration will increase more in the near future. TD used to trade at a premium, but not at a discount below 10x as it pays a 4.8% dividend (usually it's below 4%).

At a nice discount to adjusted book value. Needs to hold right in here where it is. Looks to be getting pretty cheap. Could drop a bit further, but getting to a level where he wouldn't worry. Yield is 5%.

Pays a rock solid dividend and PE's are very low now and don't make sense. Glad that they didn't buy First Horizon. Canadian banks were unfairly sold off due to the US regional bank crisis. Earnings weren't great for the banks, though. TD's loan loss provisions weren't as great as expected, capitalization is great, and their dividend is safe. Take advantage of depressed valuations now.

Likes it. Too bad it had to give up on First Horizon. Good footprint in the US. Will have to grow organically, which will take longer than by acquisition. Banks with US exposure will have a tougher slog. But over the longer term, that's how they'll grow because it's such a larger market than Canada. 

He's getting a little more positive on Canadian banks. He added some TD recently after they cancelled the First Horizon purchase which is a long-term positive, despite worries of TD not growing in the US because of regulatory concerns. Their recent numbers weren't that bad. Their capital ratios are outstandingly good. They won't raise dividends, but they could buyback shares and do an accretive buy in the US. Housing will be a slight headwind, capital markets will slow down and loan loss provisions will rise--but we all know that. It trades at 8x PE and has wads of excess capital. You can do worse than wading a bit into the banks.

Be cautious: stock might be breaking down, and he may have to sell. (Top Picks were submitted last week.) He'll give it a week or two. Potential to bounce, but keep an eye on it. (At this point, he likes the SU trade better as a Top Pick.) He only has 2% exposure. You always leg in, as it saves you from bad trades, which are part of the business. Yield is 4.88%.

One of the best-managed banks in Canada. Great acquisitions in the States. Issue is they're being hit on deposits with higher interest rates. Long runway.

Now has some $20B in excess capital. Good position to be in if they decide on another acquisition, it's a buyer's market. Could increase dividends, buy back shares. Nothing fundamentally broken. Should grow earnings and dividends at high single-digit pace. Good 5% dividend yield. Timely entry point.

Likes the sector. Stock's attractively priced given overhangs of failed acquisition and SCHW issues. Attractive multiple, both historically and relative to peers. Lots of excess cash. Yield is 4.70%.

It has the largest capital base of all Canadian banks. It has fallen to third place, price-wise, related to the other major Canadian banks so is attractive to buy now. National Bank now has the second best P/E.

Trades way too cheap at 1.4x book. Strong fundamentals. Great retail franchise in both Canada and US. Lots of capital. Still opportunity to do a deal in the US. Very safe, despite stock price volatility. Canadian banks are in very good shape. Yield is 4.73%.

Very well run, high quality, blue chip. Good brand and business model, solid balance sheet. Top 10 bank in NA. Canadian retail division generates 60% of revenues, US retail about 25%, wholesale banking represents 10%. 

First Horizon acquisition would make it a Top 6 in the US. TD can go ahead with the purchase, walk away, or renegotiate. Lots of faith in management, can create value. US banking turmoil will put pressure on valuation of Canadian banks with exposure to US. Yield is 4.69%.

He likes Canadian banks. TD has fallen alot over concerns of their First Horizon deal in the U.S. not closing, but regulators would want Horizon to be in strong hands (TD) after what's happened with SVB, etc. Canadian banks are very different from US ones, given heavier regulation here. Canadian banks are safe. TD has great retail operations in Canada and US. He expects the Horizon deal to happen and benefit TD.