Canadian Imperial Bank of Commerce

CM-T

With the flattening of the yield curve it gets harder for these companies. CM-T is Canadian focused so he likes TD-T and RY-T, which are the two best run banks in Canada.

RY is his favourite bank, but there's nothing wrong in investing in Canadian banks. The banks pay a 4% dividend and raise them by 6% a year. That's why the Canadian banks beat the TSX.

Valuations of the Big 5 are fairly compelling. The one knock against them is that they don't have a great growth platform. Risk that their growth strategy in the US won't work, as it will take a lot of money. His preference is TD, Royal, or BNS. If you care just about the dividend, you'll be OK.

We are growing slower than we think, here and abroad. Among the banks, he prefers TD and RY given their American exposure, whereas CM is late to enter to US. They also overpaid an acquisition.

For an RRSP? The bad news is that he expects only 3% EPS growth (vs. 6% for this space). Yes, it's cheap vs. its peers and pays a solid dividend. But CM remains tethered to Canadian real estate, a headwind. The banks will be market performers; he prefers TD or RY or BMO. CM is okay long-term.