Toronto-Dominion Bank (TD.TO)

He loves it and has owned it for a long time. Canadian banks are pretty cheap these days. They had a nice pullback and you can buy a great franchise in Canada at a really good multiple. This is a company that has developed a brand name in the US that no one has been able to accomplish over the years.

(Top Pick Jan 22/14, Up 7.99%) Likes their exposure, and likes it better than RY-T’s. TD-T is expanding like crazy in Florida. Maybe they will acquire a regional bank down there, although the Canadian dollar would be a deterrent.

(A Top Pick Jan 7/14. Up 7.68%.) He owns quite a bit of this because of its US exposure. They have room to grow profitability in the US as the economy improves. Thinks Canadian banks are down to the point where you can buy them again for double digit returns over the next 12 months.

This is a special kind of bank as you get some upside from their US position. When you have about 50% of your assets valued in US$’s, you should have an upward pressure in the share price. He wouldn’t be surprised to see the stock go back to $55 very quickly. However, it is all on earnings. They have said they are going to do a lot of cost-cutting. With a dividend of about 3.5%-4% and price appreciation of 5%-6%, you are probably looking at a 10% rate of return, which is not bad.

All the banks have had a pretty good run over the last year. They have really led the Canadian market up. This bank’s business, with their US exposure, is probably set up pretty well relative to some of the other Canadian banks. The US consumer is getting a big benefit out of this price drop in oil, which probably stands to filter back through some of their branches in the US. This is one of his core bank positions. This is a decent time to average into a bank.

Likes banks as a group. Have made various acquisitions in the US over the last few years, so they have a nice presence in the states, which is about 21% of their profits. Has one of the lowest exposures to energy in the group. They have a 40%-50% target payout ratio. Based on the current dividend that is in place and the earnings expected this year, the earnings ratio is about 41%. This tells her there are going to be dividend increases of 6%-8%. Trading at about 11.5X forward earnings and ROE is in the high double digits. Yield of 3.62%.

Bank of Nova Scotia (BNS-T) or Toronto Dominion (TD-T)? He thinks banks are the place to be. Financials overall are relatively good places to be in the current environment. Bank of Nova Scotia (BNS-T) and Toronto Dominion (TD-T) overlap in a lot of areas, but are quite different in terms of their overall characteristics. Scotia is a much more international bank and has been penalized somewhat lately, because of that. TD has done relatively well over the last while. They have certainly made a lot of progress in terms of positioning themselves in the US, but have also some a lot of money in behind that investment, so he feels it is a “wait and see” from a shareholder perspective. Scotia is currently selling at a discount to TD. If you were putting money in to either, on a long-term view he would rather put it into Scotia.

One of the better Canadian banks. Likes its US exposure. Thinks it is very strong and feels the financials are a good place to be.

(Top Pick Dec 27/13, Up 15.00%) One of the few that has developed a very strong brand in the US. They still have to show that their US brand will continue to make them a lot more money.

(A Top Pick Dec 30/13. Up 15.26%.) Of all the Canadian banks, this has the most positive leverage and exposure to the US banking.

In the context of a normalized portfolio, all of the big 6 banks have a Canadian franchise, and then they have something else tacked on. The tack-on with this bank is a very large US operation, and when you look around at the global economy, the US is probably going to be a star performer. Thinks this is the bank that will do the best.

There is lots of talk of interest rates going higher. We should disregard the latest earnings.

A core holding for him. There is a lot of foreign selling here. If you don’t own some, you could Buy on this dip. If you do own, he would just wait it out. The yield is safe. A good quality bank.

A good bank. Likes it because of its US exposure. He was quite disappointed that their US numbers weren’t better. Have had a big expansion into the US and are into Florida in a big way, and expects this will pay off. This is a core stock for anybody’s portfolio. Buying on a pullback is not a bad idea.

Would own it if he was to own another Canadian Bank. They have all the branches, but they don’t make all the money the others do in the Canada. The expenses are starting to get a bit out of line. When you are growing a lot sometime your expenses get a lot out of line.