Wells Fargo (WFC)

The most consistent of the US banks. It is less exciting because it does not have the exposure to investment banking. Its earnings are consistent. It is a safer bank. It is expensive and he would buy it only at a cheaper price.

Best of breed. One of the most well respected US banks. They pay a strong dividend and buy back stock. They cross sell. They are a very conservatively managed bank so you have less headline risk. A good combination of offense and defense. 16% ROE next year. A great core holding.

He is adding to his weighting in banks in anticipation of that strengthening of the fundamentals and earnings of the banks. This is a more senior bank and very involved with domestic US. One of the largest originators of mortgages. We are very early in the home building recovery. Dividend yield of 2.62%.

Canada is slowing relative to the US. US banks have been held back on paying out dividends. They will have better dividend growth. He prefers US banks to Canadian. WFC-N is his preference as well as one of his Top Picks today.

(Market Call Minute.) She would buy it here for the recovery in the US.

This has done okay, but net interest margin compression has probably hurt this more so than its peer group. It has a higher level of deposits investment securities, so it will get hit by the fact that interest rates are very low and not moving very much. When interest rates start moving back up, this can do quite well. From a valuation perspective, there are probably other banks that look more interesting. (See Top Picks.)

Financials in the US is one sector that is trading below market multiple. This is a retail bank and he considers it is one of the best in breed in the US. Had a recent dividend increase and a commitment to buy back shares. Anywhere around here would be a fair price.

This is a senior bank that is well capitalized and well-managed. Haven’t had the regulatory difficulties that some of the others have had. More tied to the housing market than any other institution. Over time mortgages will be a winning strategy for them.

(Top Pick Mar 5/14, Up 20.52%) Still one of the best managed banks in the US. The highest ROE. They were approved for a 7% dividend increase. She thinks the US economy is recovering and if rates move up this should be positive for their margins.

In his income portfolios, about 18% is focused on financials. He is focused more on asset managers, exchanges and financial services technology companies, but he does have a smaller bank weight, which is focused in the US and not in Canada. Of the big banks, he thinks this is about as attractive as any of them, because they have such a strong exposure to the housing industry. Given the stronger consumer, he thinks there is likely a pickup coming in the housing market. You are likely to see dividend growth in the stock going forward.

This is a wonderful company. They have the highest return on assets of any US bank. If you own, continue to hold it.

Range bound bank, trading in the last 3-4 months, has been terrific. This has been the best performing in the range. Canadian banks have been poor, and the other US banks have not held in nearly as well as this one. Probably the most disciplined, best run US financial institution that exists today. Now the largest lending institution in the US. Trading at a little bit of a premium. Has reduced his weighting and added Bank of America (BAC-N) and Citigroup (C-N). Believes there is more to go for the US banks. (See Top Picks.)

(A Top Pick Feb 4/14. Up 25.59%.) In US banks, this is the best of breed. Had bought this when she thought the US economy was recovering. She would buy at this level for new clients.

If he were to buy a US bank, this would be the one he would most likely buy. Very well-run. Has a lot of exposure to the housing market and he thinks the housing market will continue to recover. Has a good yield.

All US banks are reporting what is characterized as disappointing earnings. This is just a continuation of what we have seen for the last few years, i.e. very large reserves being built for litigation costs, and the fact that their loan growth is kind of anaemic and they are not making a lot of money on deposits. That is the past, and at some point things will change. The catalyst for this is going to be the federal reserve. When they start to raise rates, he thinks that the market will start to take over the yield curve and will steepen it. Feels that litigation issues on the banks will start to slow down and the banks will start to make money in a more natural way.