Banks still offer value, growth & income

Article Excerpt

Bank stocks have been among the market’s top performers in the past few years — as they have for the past few decades. Now some investors worry that rising interest rates will hurt their loan growth, and that the banks’ loan losses will rebound to the long-term average from their recent lows. That may happen, and bank stocks may face a setback. But banks always face these kinds of risk, while still providing top long-term returns. Meanwhile, in the past five years, Canadian banks have increased their share of Canada’s mutual fund market from 25% to 35%. This and other sources of growth will continue to expand their appeal. We still feel all Canadian investors should aim to own two or three of the top five banks. We like all five, particularly now that Ottawa plans to cut taxes on dividends. ROYAL BANK OF CANADA $88 (Toronto symbol RY; SI Rating: Above average) is the largest of Canada’s big five banks, with total…

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