Comparing Canadian Banks / New Buy
Comparing Canadian Banks / New Buy
Hey! Today’s post will be a simple comparison of the Canadian banks followed by another purchase. I currently own td, bmo and National bank. They have all done very well for me since I bought them. I wanted to either add to one of my current positions or diversify into another if they seem to be a good value. I’m sure you know about Canada’s banks. They are some of the best banks in the world.
Everyone talks about the big 5. Royal, Bmo, TD, BNS and CIBC. This post will look at the others as well. 8 in total from what I recall. We will also compare National Bank, laurentian bank of Canada as well as Canadian Western Bank.
Im not going to get into what each bank is currently doing or whatnot. I just made a chart comparing their yields, price to earnings ratio as well as how much the stock is below its 52 week high.
Please keep in mind this chart is for today’s date – June 19th 2018. In the future these numbers will be different.
Here it is…
|Bank||Price / Earnings||Dividend Yield||Percentage off 52 week high|
|Laurentian Bank of Canada||8.0||5.67||%28.48|
|Canadian Western Bank||13.4||2.78||%11.29|
|Bank of Nova Scotia||11.1||4.31||%11.21|
|Royal Bank of Canada||13.1||3.74||%7.87|
|Canadian Imperial Bank of Commerce||10.3||4.61||%7.10|
|Bank of Montreal||13.1||3.75||%3.07|
As we can see all the banks I currently hold are really not far off their 52 week high. In fact they are all less than 3.5% off their highs. I decided to look into the other banks for more value.
laurentian bank of Canada
When I made my last purchase this month I mentioned how laurentian bank of Canada has been getting pummeled lately and I will be watching them. Clearly they are the best value play, out of every category they are the lowest. There is a reason for some of the pullback. They have been caught with problematic mortgages or loans. While the ceo claims its been overblown and things are fixed. I dunno, when it comes to Canadian Banks and mortgages that is the hot issue at the moment. Everyone is worried about a housing collapse like the U.S had a while back. The stock price continues to go down, Ill sit this one out currently.
Canadian Western Bank
Next on the list for furthest off their 52 week high is Canadian Western Bank. I really don’t know much about them, other than they have the longest streak of raising their dividend for Canadian Banks. They have boosted their dividend for 26 years! Not bad, unfortunately their yield is though…… And a price to earnings ratio comparable to td? Next!
Bank Of Nova Scotia
Recently I keep stumbling on articles about how solid BNS is for a Canadian Bank. I love how they have expanded to Latin America, and it seems like they keep buying new banks down there all the time. Td has done very well with their US expansion and I think BNS will do the same with down there. The huge population will be a nice tailwind for them. They also currently hold the number 3 spot in each category. Their p/e of 11.1 is the third lowest of the bunch. The yield of 4.31% is nice and juicy, but is also the third highest yield currently. The north of 11% off their 52 week high sold me though!
I decided to get my feet wet with Bank of Nova Scotia before their ex dividend, which is June 29th.
The Bank of Nova Scotia is an international bank and a financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific. As my portfolio in general is really loaded on the Canadian side of things its fantastic to have this much diversification from a bank!
This is a new position for me. I bought 13 shares at $75.61 per share. For a all in cost of just under $1000 bucks. This buy adds $42.64 in forward dividends to our portfolio.
In today’s market there tends to be a lot of value if you look around. Banks are pretty solid investments and with P/e ratios between 8 and 11 and a half. These are great prices. I was actually surprised to see RBC is down almost 8% from its 52 week high. Its crazy to see all three of my existing positions so close to their 52 week highs. Kinda makes you think of swapping them up! haha.
Anyways what do you think of my newest addition? Based on today’s ratios which one would you buy?
Have a great day!
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.