Good time to buy Canada’s big banks

Article Excerpt

The shares of Canada’s big five banks have moved down recently, mainly due to fears that a slowing economy and rising interest rates will cut demand for new loans. However, each of the five continue to lower their costs and expand outside of Canada. That should spur their future earnings and dividends. TORONTO-DOMINION BANK $68 (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $122.4 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.td.com) gets 56% of its earnings from its Canadian retail business. The U.S. supplies a further 35%. The remaining 9% comes from securities trading and investment banking services. In the quarter ended October 31, 2018, TD earned $3.05 billion, excluding one-time items. That’s up 17.1% from $2.60 billion a year earlier. Due to fewer shares outstanding, per-share earnings rose 19.9%, to $1.63 from $1.36. Earnings from Canadian retail banking operations increased 4.6%. That gain was due to strong demand for new loans…

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