Q: Which of these two banks has the most uplift? Is the dividend safe with both? What are good entry points for both?
5i Research Answer:
While CWB is more expensive on valuation (8x earnings vs 5x) we would still be more comfortable with it. LB is floundering a bit following its failed sale, and it needs to re-focus. Meanwhile CWB's western Canada focus will help its positioning as the energy sector is now flush with cash. We would consider LB's dividend to be at 'some' risk though would not expect a cut in the short term. But earnings/cash flow need to improve.