Q: I currently hold CIBC and BNS and think it a good time to add to Canadian banks due to the low valuations and high dividends. Do you see any issue with this? Time horizon is at least 6 years. Should I add to these existing or add the other 3 large Canadian banks? I also hold the BMO Canadian banks in my wife's portfolio.
5i Research Answer:
We think the banks are buyable for income and growth recovery. They are not risk free but priced very well. We are not too concerned with the sector over a six year period. We do not think four or five banks are needed, and might suggest only RY as the largest bank if one is to be added.