Toronto-Dominion Bank (TD.TO)

For banks it is really price to earnings as the metric for value. TD is at premier valuation and is a premier bank as well. All banks have slower mortgage growth and so growth will require more capital. This is a premier franchise that did a fantastic job of entering the US market. It is a good bank, but see his Top Picks today.

One of his core holdings. Canadian banks are stocks that you buy and you hold forever. Trading at around 12.5X this year’s earnings. Before 2008, they typically traded between 12 and 13.5 times earnings. Any time it gets down to 12 times, you Buy. Banks are due for a bit of a breather and he would probably wait until the fall.

(A Top Pick May 30/13. Up 31.83%.) Likes this and the Royal Bank (RY-T). Expects this will continue to do well. Has a great franchise in Canada, and a growing and good franchise in the US. Also, have a strong brand name in the US.

This is one of his core bank stocks. Stock has had a little bounce here. You can sit back and wait. The market will probably drift upwards, but he feels there will be some sort of correction in the next 2 to 3 months, so you can wait for a pull back, maybe to the $51 range This is one he would recommend for anybody’s portfolio.

(Market Call Minute.) New 52-week high. As with the other Canadian banks, you should buy and hold as it will give you decent earnings and dividend growth.

(A Top Pick July 30/13. Up 406.25%.) (Bought Jan 90 Calls at $1.60.) These expired last January.

(A Top Pick May 3/13. Up 33.64%.) Had a 2-for-1 stock split. Banks continue to perform well. Very comfortable that banks are going to continue to deliver reasonable earnings, probably in the 5%-7% range. On top of that you are going to get the dividend, probably in the 3%-3.5% range.

All-time high today. There have been a lot of people that have lost a lot of money trying to Call the top and Short the banks. These are diversified businesses that just keep churning out profits. The resiliency of these businesses is incredible. Certainly we are going to see slowing in loan growth, but today we saw that wealth management did well. Doesn’t think there will be a lot of growth, but you have low single digit growth and low single digit dividends.

(A Top Pick May 29/13. Up 27.05%.) Continuing to buy this for new accounts. Doesn’t see them going off making any rash acquisitions just for the sake of it. If something came up that was logical, that might be different.

Likes it. One of the stronger banks. Likes BNS and HCG-T slightly more. The Aeroplan credit cards should do well for them. He doesn’t want to be there because he doesn’t think banks will outperform the market.

Stock vs. Stock: TD or BNS. Half business is retail in Canada and then US puts it up to 70%. Lower return, but less volatile. Recommends you buy both.

This has a medium-term EPS growth target of 7%-10%. Until long-term interest rates go up, they’ll have a tough time meeting the 7% although he thinks they will do it through good cost control. When interest rates ultimately go up, it could exceed that 10% level. Because they had a lower dividend payout ratio than the others, he thinks their dividends will grow faster than earnings as they have now raised it to the 40%-50% range, the same as other banks. A good way of playing economic recovery in the US Northeast.

TD has it all. The winner of all the banks. Better earnings growth, better ability to protect loans and better US operations.

(Top Pick Apr 22/13, Up 33.46%) He is buying this for new accounts. It should be a core holding. Likes the North American growth profile.

He is not anticipating the Canadian retail network doing all that well. We are seeing more muted growth across the board. They have a fantastic operation and have built up a great US operation. You want to be patient with this one. You could probably buy this 8-10% cheaper this summer. Prefers Wells Fargo in the US.