Toronto-Dominion Bank (TD.TO)

Banks will be higher by year end. The one looming thing is the impact over the years of FinTech. The banks are spending a lot of money trying to match what is coming down the pike in terms of high-tech, and he thinks they’ll succeed. Expects they will go 5% higher, including dividends, by the end of the year.

(A Top Pick April 27/15. Up 2.47%.) Banks are great buys and this is his favourite, along with Royal (RY-T) and Bank of Montréal (BMO-T). He likes their US exposure and the continued likely acquisition programs in the US. Looking out 2-3 years, banks are a great Buy.

Sell to get into a stock that has more growth? He likes this bank. A good, long term holding. You get 50% US, which is a little better growth. They are good operators. Dividend yield of 4% and it is going to grow. If this has become more than 7%-8% of your portfolio, he would consider selling it for diversification. Choices that are similar are all a little more expensive than the banks. (See Top Picks.)

(A Top Pick April 10/15. Up 4.85%.) He is hoping to see a dividend increase. If you want exposure to the US banking system, this is probably the better way to do it. They have a good foothold. With the US economy growing faster than Canada, this is a good place to be.

This has traditionally been his #3 bank, and he is thinking of upping his exposure. They have done a very good job in the US and captured a significant part of the retail market there, as well as in the brokerage business. Trading below its historic P/E ratio and Price to Book ratio. Dividend yield of 4%.

Thinks there is still another wave to come in energy. While this bank doesn’t have as big an exposure as some others, he doesn’t think it has all been factored in just yet. He has been somewhat light on the banks. The one thing this has is a significant exposure to the US.

From August through to the end of the year, banks do quite well. The 2^nd period of seasonal strength generally occurs from February through to April, and then the stock tends to level off. Charts show this has rolled over in the last couple of days because of selling pressures. Support level would be at $52.50. If you are still holding banks, look for something that offers a covered call write strategy.

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.

He cares most about business risk to the banking sector overall. See his educational segment today. The banks had a great run from January, but he does not like owning banks generally. He does not like TD-T here and is underweight financials as a source of dividends in his dividend fund. He did hold it earlier in the year for a while.

He likes it. But they generate about 50% of revenue in the US and he captures that through US regionals. He would be a buyer otherwise. There is upside and the dividend is safe. He is underweight Canadian banks as a whole.

(A Top Pick April 10/15. Down 0.06%.) Has been adding to this recently because Canadian banks are under this big Shorting position from the US. All the banks look cheap. Yields are up and they keep increasing their dividends. Their big US content should do well. Dividend yield of 4.1%. (See Top Picks.)

(Top Pick Mar 18/15, Down 0.53%) They upped their dividend. They are doing exactly what they promised. There is a significant contraction on the PE ratio. He thinks it is an incredible opportunity. They have the smallest exposure to the oil and gas area and also have the most exposure to the US .

(A Top Pick Feb 23/15. Up 1.39%.) This and its US exposure makes this his favourite bank. 25% of businesses is from the US and exposure to oil and gas in Canada is minimal. Also, thinks the banks are smart enough to know what is going on, and will make a move to acquire the technology they are relying on. Dividend yield of 3.9%.

A good Buy at these levels. All the banks are discounting or have already discounted the oil price decline in Canada. There has been US Shorting on our bank names because of assumed real estate exposure. However, he thinks valuation is attractive on pretty much all of the banks.

TD-T vs. BNS-T. They are different in terms of the business. Both get half of their revenue from outside of Canada. BNS-T has been beaten up more because the Latin American economy is less stable than the US. It is a good entry point if you don’t have exposure to Canadian banks. It will be a 9% return including dividend for 5 years amongst volatility.