Toronto Dominion (TD.TO)

Canadian banks are reasonably priced, but still headwinds on loan losses. He likes the one with the best balance sheet, TD. He also likes CM, with its outsized dividend yield and low valuation. BMO is OK.

For the heavy lifting in your portfolio, he'd look instead at insurance companies with similar yields and more growth over the next 1-2 years.

It has the leading market share in Canada along with Royal Bank. It wants to target the banking needs of a growing number of new immigrants. Credit cards are also an area of growth. The Horizon deal didn't go through so it has excess capital for buybacks, etc. We could see some more M&A.       Buy 13  Hold 4  Sell 1  

Well capitalized. Cheap at these levels, you'll do well. 10x earnings, 1.4x book, not expensive. Great retail franchise, reasonable investment banking. US side will improve on ROE over time. Great dividend yield of 4.46%.

Able to play offense in a tough environment. Valuation of 10x earnings, discount to peers. Most excess capital of any Canadian bank. A conservative commercial real estate lender, so exposure isn't outsized. Yield is 4.49%.

Very well run, high quality. Strong brand, good business model. Flush with capital, so probably hunting for a good asset. Cheap. Impressive dividend yield. Buy it here.

He's not sure that the crisis is over. Excess savings during Covid are waning as inflation bites. Canadian banks are valued reasonably, so are good to buy now as a long-term hold. But inflation could bite and trigger defaults and credit spreads widening on corporate bonds. He's waiting. You can buy a partial here and wait, because such shares could go lower. TD shares have moved from $78 to $83 recently. He bought, but is sitting tight.

Likes Canadian banks as a group, well capitalized. She favours TD and RY, with exposure to US growth. Attractive yields. She doesn't think we're going into a deep recession in Canada or the US.

Has lagged the group specifically because 30% of its business is US retail. US banking came under significant pressure in March. Plus, First Horizon deal fell through. Typically trades at a premium, but now at a discount to the group. High quality, solid dividend. Significant amount of capital of around $16B to deploy into M&A, increasing dividend, or investing in the business. Yield is 4.69%.

(A Top Pick May 25/23, Up 1%)

 When trading Toronto Dominion, he would draw the line between $78 and $83. It could move to around $90. Put a stop loss in at close to that range.

BNS has been a perennial underperformer, he sold. Not tempted to buy the Canadian banks right now.

TD gave pretty decent targets of high single-digit growth over the medium term. Market doesn't believe them, stock remains under pressure. Worries about Canadian housing, economy, higher interest rates. A lot of the damage is already in the share price.

He owns NA. He looks for the best companies that have the best management and add value over 3-5 years, and doesn't worry about day to day stock prices.

It is an attractive dividend paying stock with a 4.7% yield. It has dropped to third in the list of Canadian banks but is the most capitalized bank with lots of excess capital, $16 billion. It has a 1.6% share buyback program in place and is undervalued.    Buy 14   Hold 4   Sell 1

Trading at 1.4x book, close to 10x next year's earnings. Great franchise, lots of capital. Will probably go after another US acquisition. Very diversified, which protects them in a difficult environment. Good time to buy, you'll do well. Yield is 4.78%.

Very well run. Typically doesn't trade at a discount to peers, but it is today. Massive excess capital from failed acquisition gives it lots of levers to pull in a difficult environment. Over the medium term, good upside on multiple and earnings. Yield is 4.81%.

A top pick last month. Shares are attractive. Likes the banks. The overhang of the First Horizon cancelled deal resulted in TD holding a lot of capital. TD will expand more in the US, and maybe buy another company. TD will focus on Canada as immigration will increase more in the near future. TD used to trade at a premium, but not at a discount below 10x as it pays a 4.8% dividend (usually it's below 4%).