Canada’s stock has been rising quietly - the Canadians are known for their modesty and self-restraint - as American financiers and media are astonished to find that their northern neighbors have somehow avoided the subprime lending scandal and the housing market mess.
What’s Canada’s secret? With the exception of oil-rich Alberta, Canada did not have a strong construction surge as the United States did during the boom years. And mortgage interest is not tax deductible in Canada.
Canadian banks are national in scope; the top five banks have branches in all 10 Canadian provinces, making them less susceptible to downturns. They have large numbers of loyal depositors and a more solid base of capital. They are more tightly regulated than their U.S. counterparts, more liquid and less leveraged.
Among the top 10 largest banks in North America, 4 are Canadian banks:
- Royal Bank of Canada,
- Bank of Nova Scotia,
- Bank of Montreal,
- and Toronto Dominion, which bought Commerce Bank last year.
Canadian bank executives don’t have to be excoriated by Parliament before taking a pay cut. The CEOs of Canada’s three-largest banks have all voluntarily cut their own pay in response to the global economic crisis.
Canada has its share of problems - being linked to commodity prices - but financially it’s done a better job than its southern neighbor. While the Bush administration ran up massive deficits year after year, Canadian officials finally pushed through a stimulus package that resulted in the government’s first deficit in a decade!
Right now, the Canadian banks are selling at incredible bargains. With operating margins exceeding 30%, and dividend yields between 6% and 8%, Canadian banks are selling at only around eight times earnings. Bank of Montreal is selling for only six times this year’s expected earnings and is yielding 10%.
During a crisis, the good investments get hit like the bad ones. But when the markets recover, the good bank stocks will skyrocket.
Toronto real estate. Canadian Banks Receive Highest Rankings
![Toronto real estate. Canadian Banks Receive Highest Rankings]()
Reviewed by citra
Published :
Rating : 4.5
Published :
Rating : 4.5