Toronto-Dominion Bank (TD.TO)

In his opinion, this and Royal (RY-T) are the best in class. You not only get stability from the Cdn retail, but also half their assets are in the US. They are just beginning to get synergistic between the 2 countries. Cheap relative to Book Value.

The valuations on banks are not hugely challenging but the growth targets are not high. He does not think credit issues in Alberta are significant. They are okay and you get almost a 4% dividend. It won’t be the best year for them but that is in the price. A good long term place to be and he likes their US exposure.

His favourite. The best exposure to the US which is the best international market to be in. Not a bad time to average in. He does not see huge catalysts but also not a lot of downside.

This would be his top bank given the push that they have in the US. They have had great success in being able to build out there retail franchise. Approximately 22% of their adjusted earnings come from US retail banking. In terms of being able to compete and benefit from a US tilt, this is probably one of the best banks. Trading at a reasonable valuation of 11.3 X forward earnings. Dividend yield of 3.78%.

You really have to give management the benefit of the doubt. They have proved that they can actually grow and add business lines. This is the premier bank. The 2^nd largest. Have more branches in the US than it has in Canada, so are no longer restricted by what is happening in the Canadian economy. Banks have had a period where their bad debts have been fairly low, but are now starting to pick up.

Sold out of his Canadian banks back in mid-January. A little bit bearish on Canadian banks in general. Until the pattern of lower highs and lower lows finishes, he doesn’t think he would buy this. The fundamentals are great for the banks right now.

A wonderfully well-run company. Dividend is great. Stock has dropped, but just don’t pay any attention to that. The fundamental value of these businesses changes far more slowly than what the traders would have you believe. If it gets really silly, you buy more of it.

Came out with encouraging news the other day. They are expanding in the US and it has been underperforming. Last quarter their US side offset a decrease on the Canadian side.

Banks should start to run here. They have all fallen off a bit. The chart on this shows a big rounded top. It would need some sort of break out to a new high, which would get it above $59. If you’re buying this simply for the yield, this looks reasonable. Expect some volatility, but he wouldn’t worry about it on a long-term basis.

You are going to have a solid 8-10% total return. The key factor is how well it does in the US. As the US economy picks up it will have a positive effect on Canada.

One of his favourite banks, and he likes it because of its US exposure. Their exposure tends to be very close in Northern US, New York state particularly. However, they are expanding rapidly in Florida. If we are positive on the US economy, then a bank operating in that environment is probably going to do just fine. A good investment.

The best Canadian bank to own for foreign exposure, considering the low Cdn$. Have done a great job of building their US retail franchises. Also, own a piece of TD Ameritrade (AMTD-N), which is a big beneficiary of the strong markets in the US. However, Canadian banks in general are facing headwinds with weak energy prices, the difficult capital market activity and low rates putting pressure on net interest margins.

She can easily see this being up 10%-15% higher a year from now. The Canadian banks have all pulled back on concerns relating to energy and the fallout of lower fuel prices. Alberta housing is coming off, but other parts of the Canadian market are still robust. Have good US exposure through their acquisitions of the last few years.

For a long term hold, Bank of Nova Scotia (BNS-T) or Toronto Dominion (TD-T)? Of these 2, he prefers this one. Over many years they have expanded their footprint in the US and are quite strong along the eastern sea coast. They have more employees in the US than they have in Canada. Even though there are lower ROEs in the US, you are going to repatriate some of those earnings back to Canada, giving a benefit of 24%-25%. Extremely well-run.

If the Canadian economy slows, it makes people a little concerned going on from here. Any time you have a bit of a blip in respect to credit related to the banks, it is sort of exacerbated. As a shareholder, you are not going to get hurt like you would in the US, but you can definitely feel it. He is a little concerned because the credit cycle has been very favourable for a long period of time. It is a cycle and it does come back. He is generally underweight banks and would want to wait before getting a little more comfortable.