Q: Good Day,
I hold TD and RY in my RRIF and was thinking of switching one for BNS for a higher yield and the "buy the poorest
performing bank" theory. Is this a logical approach and which would you switch.
Thanks Tom
I hold TD and RY in my RRIF and was thinking of switching one for BNS for a higher yield and the "buy the poorest
performing bank" theory. Is this a logical approach and which would you switch.
Thanks Tom
5i Research Answer:
It is true that usually when the economy recovers, marginal companies in the same industry tend to perform better than well-managed companies.
Having said that, we don’t think BNS is too far behind in terms of operational efficiency and the quality of its loan book, but BNS is trading at a meaningful discount compared to peers, currently at only 1.0x Price/Book. We are okay to trim some of RY or TD for BNS at these prices. But if only one to trim, RY.