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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Retired, dividend-income investor who normally holds for the long term. I own a half position in Manulife and am down roughly 7%, including dividends. My long term plan was to sell MFC and rebuy a second Canadian Bank (I already have a full position in Royal Bank).

I have compared the various metrics (P/BV, P/CF, P/S, ROE, technicals, analysts estimates, etc.) for the above mentioned banks as well as against MFC.

Looking at the banks in isolation and already with a full position in RY, I've narrowed it down to either BNS (International exposure and current laggard due to Covid) or TD (more US exposure and 1 year laggard). Of the banks that I do not own, please rank them in order of the best total return over a sufficient period of time for Covid to have subsided (1-2 more years for improved vaccination coverage?). Do you agree with my rationale?

If you include MFC into the bank comparisons, where would you place MFC in the rankings? I have read to buy the banks when their P/E is < 11.0 and buy the insurance companies when their P/BV < 1.0. This would lead me to buy TD (P/E of 9.7) or keep MFC (P/BV of 1.0).

So...keep MFC versus take the loss in MFC and then buy BNS or TD? Your thoughts?

MFC is held in a taxable account and I have no problem taking a loss.

Thanks for your help....Steve

Read Answer Asked by Stephen on September 08, 2021

Q: I know that ranking banks often is like picking shades of the same colour. At this point in time do you feel there is any "clear" division amongst any of the banks for investing purposes? Can you give your order of preference and the magnitude of the gap between each choice.
Thanks,
Terry

Read Answer Asked by Terry on September 07, 2021

Q: Hi Peter,
With reported earnings and the potential for dividend hikes later this year, what looks better to you now; Cdn Banks or Cdn Insurance Co's ?
Is there any noticable advantage or disadvantage to holding a covered call on a Company etc if/when they raise their dividend ?
Thank you.

Read Answer Asked by Paul on August 28, 2021

Q: I am going into retirement and below are the weightings of stocks held in my portfolio. Although the portfolio performed okay over the years, I wonder if there is too much concentration and would appreciate your ideas on diversification given the economic times we live in. My portfolio is about $2M with an investment loan of $150K for which I use the dividends to repay. Thanks. BNS 37%, TD 18%, CM 14%, BMO 14%, BCE 6%, SRN.UN 6%, RY 4%, POW 1%

Read Answer Asked by David on August 26, 2021

Q: I hold the Canadian banks in my dividend portfolio and they have served me well over the years as a core hold.
Should I reconsider these holdings in light of new taxation rules being suggested?

Read Answer Asked by Denis on August 26, 2021

Q: hi there - just a follow question on your recent answer to the question on CM and the note you included on uninsured mortgages. Correct me if i am wrong, but uninsured mortgages are those where the borrower puts down more than 20% of the value of the home and therefore does not require insurance. How is this more risky than insured mortgages where the lender is putting less than 20% down. This seems a bit backward in terms of interpretation. For example, i have an uninsured mortgage and own 95% of the value of the home. How is this more risk to the bank?

Read Answer Asked by kelly on June 29, 2021

Q: I am currently way overweight in Canadian banks and would like to gradually cut my overall exposure to about half of my present total value. Would you please rank the above stocks in light of each expected Total Return over the next 3 - 5 years?
Many thanks.

Read Answer Asked by David on June 24, 2021

Q: You have mentioned several times that it is expected that later this year the big banks will be given a free hand in allowing dividend increases, is there any analyst guidance/guesses out there on what sort of increase is 'expected' from the banks over the next 1-2 years (and may be baked in to the share price at the moment). Or is it expected to be more a case of just going back to a more normal cycle of increases rather than catching up.

Read Answer Asked by Graham on June 10, 2021

Q: If you had to sell all or some shares of one of the 5 big Canadian banks to generate some cash, which would you choose and why?

Thanks very much!

Read Answer Asked by Chris on June 01, 2021

Q: The above listed stocks are in the $C side of my husband's RRIF. I would appreciate your input on which stocks to reduce or eliminate to make his annual withdrawal. Please rank from first sell/reduce to last. For context, our overall portfolio is overweight technology and communication services (primarily GOOG & DIS)
Thank you, Jane N
PS please use as many credits as needed.

Read Answer Asked by JANE on May 05, 2021

Q: In March 2020 I did a lot of tax-loss selling (and proxy re-buying - thank you, I wish I had known to do that in 2008). I sold two Canadian banks and bought two others, BMO and CM. I did not sell them after I got my money back but let them recover. Consequently I have BMO up almost double and CM up 70%. Is there any reason to sell them to re-buy the original banks which will trigger a capital gain? I have no capital losses in that account.

Read Answer Asked by J on April 26, 2021

Q: For growth and potential dividend increases, would you please rank the six Canadian banks (the ‘big 5’ plus National) in order of preference to buy now?
Thanks!

Read Answer Asked by Heather on April 07, 2021

Q: I am trying to maximize income In my LIRA before I convert it to a LIF. I hold a good weighting of ZEB from several years back when I was a novice investor. Now I am looking to shed the MER by going with the individual financial stocks. Would you please rank the above financials and others you think are worthy for a hold and forget steady income stream?


Thank you


Steve

Read Answer Asked by Stephen on March 15, 2021

Q: Retired dividend-income investor. Short term (weeks to months, not years), which stock do you think will produce the most Total Return...Sunlife or CIBC? When I compare their charts over various timeframes and look at their fundamentals, I don't get a clear picture. I am leaning towards SLF.
Thanks...Steve

Read Answer Asked by Stephen on March 11, 2021

Q: Good afternoon,

I am looking to investing into a bank for a long term hold. Which would be your favorite for long term growth

Thanks

Read Answer Asked by Bonnie on March 10, 2021

Q: All the big banks have had very encouraging financial results. Is now a good time to add in preparation for big dividend increases once the regulatory hold comes off.

Thanks.

Read Answer Asked by Dave on March 01, 2021

Q: Would you please advise the approximate amount of excess capital (or equivalent) each of these five Banks are holding based on their year end results.

Thanks

Read Answer Asked by Robert on January 27, 2021

Q: I am looking to "trim the fat" from my TFSA, which currently holds 20 stocks: ATD, BCE, BMO, BNS, CCO, CM, ENB, FFH, PDYPF, INO.UN, LAS, NXE, NWC, NA, NTR, PEY, PZA, MJJ, TRP, WELL. Are there any positions that raise red flags with you? In addition, could you suggest 3 or 4 value picks suitable for a long-term hold (20 years plus)?
Thank you!

Read Answer Asked by Sarah on January 14, 2021