Wells Fargo (WFC)

This is one of those banks that came through the crisis very well. Have rebuilt their capital. They were held back on dividend increases. Paying out only about 20% of their earnings in dividends (2.95% yield) but this could go to 40% over the next few years. A play on a slowly recovering US housing market as well as commercial lending which is showing double digit growth.

Perceives a risk. She plays banking sector in the US with C-N, which is still a buy to her.

Great bank and never got itself in trouble during the financial crisis. Had a much stronger balance sheet and much better loan book than its creditors. To him a lot of the US banks, including this one, have recovered and are trading at fair value. Better value elsewhere.

Best run bank, perhaps globally. Fabulous management team. Generating gobs of cash, buying back shares and raising dividends. Fully recovered from the 2007 prices. There is a rumour that they are going to be bidding on some UK assets. Swimming in cash.

For a long-term hold of 3-5 years? A high quality U.S. Bank so for a long-term hold she thinks it is pretty good here. 19 biggest US banks had to submit their capital plans to the Fed in March for the upcoming year. This is one of 3 or 4 banks that wanted to increase their dividends and this was approved.

(Top Pick Apr 25/12, Up 13.5%)

(Market Call Minute.) Beneficiary of a stronger housing market. You could own it but he would prefer a Citigroup (C-N) or a J.P. Morgan (JPM-N). (See Top Picks.)

(Top Pick Feb 15/12, Up 20.17%) Didn’t fall as far during 2008 as the others. Always been a well run bank. Huge mortgage business and it will continue to help them. Slight risk is that since they are slowly moving into investment banking and that brings a little more volatility to their earnings mix but it is not significant as of yet.

Probably best-of-breed in terms of governance and management. Had some very strong growth in mortgages recently. Longer-term, recovery in the housing market is going to do wonders for US banks. It’s going to be driven on the back of better employment and better business growth. He is looking at this one.

He has more US bank exposure than Canadian because he thinks there is some pretty good value there and some improvements are taking place. This one is the cream of the crop with a valuation that would reflect that, trading at 1.8X book value. Bank of America (BAC-N) might be more interesting in the near-term, with the possibility of a dividend increase coming at the end of the quarter.

(A Top Pick Feb 15/12. Up 15.99%.) Great company. Benefiting from what is going on in the US on the mortgage and housing sides and will continue to benefit. (See Top Picks.)

Get half your position now as it has come off the highs. Trades at about 10x earnings. Higher yield than Canadian Banks. He would only get this if he was full up on Canadian banks.

Has started to roll over. One of the better run US banks. Has good support at around $30. If it broke down through this, it will probably go down to $26.

Trades at about 1.5X tangible book value but should trade at 2. As the US housing market continues healing, the mortgage books of the banks are going to get better. US GDP is 2% and could go to 3%.

US banks are a “risk on” type of trade, highly leveraged to the economy. If you are long the stock, stay with it but just be aware that if the market does begin to weaken, this will be one of your 1^st victims.