Toronto-Dominion Bank (TD.TO)

One of the cheapest Canadian banks. Likes their growth strategy in the states. Not that much exposure to mortgages. Relatively immune to fears about real estate. Gradual dividend and earnings increases.

A lot of people are saying Canadian banks are not going to do much in this kind of environment. Mortgage market looks a little soft and they are rushing off to buy US banks. Why buy US banks when this is a Canadian company that has a big US bank holding? Have more branches in the US than they do in Canada. They are in a part of that market that has come through the US recession quite well. Yield of 4.03% and wouldn’t be surprised if there were more dividend increases.

Solid bank. The only issue that Canadians face with the banks is how much you should have in your portfolio. If you are over 40% in banks, that is too high. Within the banks, this is one of the great ones in Canada.

Toronto Dominion (TD-T) or National (NA-T)? Feels this is the better bank. Has better opportunities in North America and made some really great acquisitions. Don’t expect the big moves that you have seen with the banks in the last little while. They’ll probably improve 10% and will have good dividend increases.

You might see some stock splits but that doesn’t matter for his purposes. TD are the most focused of the big 5. It is a great retail focused company.

He doesn’t hold any banking stocks in his funds right now. If you’re holding it for the long term, it is probably a good Buy. Cdn banks are due for a little bit of a slow down here. Have had an incredible run in a very tough environment, and some of the things that have created this good run are going to slow down a little. (See Top Picks.)

Has a strong belief in the retail banking model. Believes in their US presence. Equal number of branches in the US as Canada and he thinks it is an attractive buy – excellent.

Likes their strategy over the last several years – buying assets in the US and built a great brand in the US with TD bank. They made some astute acquisitions such as Chrysler finance. In the US they pay off their cars, even if not their houses.

Will capture growth in the US from its existing franchise. Has been some discussion about them taking over Citizens Bank in the US, which would have been an interesting fit but Citizens Bank was doing an IPO which means an acquisition is probably not on. It may raise the stock price as people were worried about what they might have had to pay and when for the acquisition. Yield of 3.65%

Preferred Shares Moved into Common? If interest rates rise then preferred do poorly. Rule of thumb is if you are bullish on the company then you buy the common. But now that they are at an all time high, move over into the preferreds. Move back when TD-T corrects 15%

(Market Call Minute) Yield is attractive and sees dividend increases at the end of the year.

He doesn’t like the banks here. They are at the high end of their range. This is a decent time to raise some cash in the banks. This is a trading call and not a fundamental call.

Doesn’t think there will be a pullback in the near term. Even a year out it will trade around $88.50 with under a 4% yield. Look south of the boarder if you want a little more risk. Canadian banks will do their thing here but there is nothing wrong with them.

This and Bank of Montréal (BMO-T) have the cheapest price earnings ratios at about 10.6%. Good growth. As the general economic activity picks up in the US, this will auger very well for them, plus its new card business. Price target of $90 plus the 3.69% yield makes for a very nice return. Look for an entry point of $82-$82.50.

Bank of Nova Scotia (BNS-T) or Toronto Dominion (TD-T)? TD has more of the personal banking and have that space going very well and, obviously, Scotia has a Latin American exposure. With Scotia you are paying out 11X, which is similar to TD. The only difference is that he thinks TD will increase its dividend a little bit quicker over the next 2-3 years. Likes Scotia’s Latin American exposure.