Royal Bank (RY.TO)

Cornerstone of their dividend growers portfolio. Balance of growth and income that's compelling, defensible, and sustainable through the cycles. Biggest, best, trades at slight premium to the group. Accelerated earnings growth, loan loss provisions released back into earnings. Capital markets and wealth management are second to none and booming. Reduced OSFI provisions paves the way to make more loans, buy back shares, or increase dividends.

Banking group up ~75% in past 12 months, unlikely to repeat in the coming 12 months. But that doesn't augur an immediate pullback. Valuations are breaking paradigms. 

She wouldn't be overweight at this level, as banks are ultimately a leveraged bet on the health of the economy. Good news is that earnings have held up much better than many expected. She's still watching credit losses. Has the broadest mix of Canadian banking, leader in wealth management and capital markets. Keep holding a balanced position.

Premier Canadian bank, and it trades at that kind of valuation. BNS has had some issues. Change in management, change in focus. Cheapest of the banks on a PE basis.

It all depends on how long you're looking to own for. Even if you've made gains, hold on to what you have. He's sticking with RY. 

Many who have held this for a while face the problem of taking the capital gain and turning it income for the rest of their lives. Selling RY pays a 2.39% dividend could work if it's in a registered tax so you don't have to pay that tax immediately. The stock market looks toppy, so you can take some profits and transfer that in a high-yield security to generate income.

The banks are very well positioned. Benefitting from GenAI and AI investments. Regulatory environment is in their favour with OSFI lowering threshold for risk-weighted assets, which means they have more capital to lend. Consumer is reasonably healthy. As long as interest rates don't go flying through the roof anytime soon, the banks can continue to do well.

Same business it was a year ago. Capital markets and asset management doing well, retail doing OK. But it's up ~70% in 12 months or so. Trading close to 3x book value, 10-year average is 2x. A bit excessive. He's been trimming Canadian banks. Still the best-quality bank in Canada.

Capital markets and wealth management businesses have driven the Canadian banks. They've benefited a lot as the stock market rises. THe underlying retail banking business is sluggish, but there's optimism here, because next year mortgage renewals will no longer be a headwind to the Canadian economy. The banks have endured with minimal loan losses. The PE of the Canadian banks is historically high, but they remain great options to own.

You can buy those calls back, and then roll up to $320 or so. If you buy back the near-term call, and then sell a longer-term call, chances are it won't cost you any money.

Absolutely don't sell a put to oblige yourself to buy more, not right now. You want to sell puts when the premium is really good. Premium here isn't good, as stock's been heading straight up.

Great quarter. Belle of the ball of the banks. Strength in Canadian lending in both personal and commercial. Less cyclical than before, as rough markets lead to more trading and helps diversify earnings profile.

Trading at 17x PE, whereas longer-term multiple is around 12x. Outlook for earnings growth is still very robust, but potential for re-rating downwards on the multiple. 

Trim a bit, just to buy something that's a bit more undervalued. If coming in fresh, wait for a more attractive entry point.

He's a bit wary on the sector, and questions the high valuation as well. Always traded at a premium -- stability, growth, strength in wealth management. But the premium has eroded, as they're all expensive now; that argues for holding onto this one. CEO stated that demand for credit and loans is staggering, which would support another leg up.