moneygardener

High Expectations for Canadian Banks Is Unrealistic

First off to Seeking Alpha, the title of the article is not proper grammar; please revise.

To Chez,
Just as the sell off was overdone, the rally is overdone in Canadian banks. I would have alluded to all banks if I actually felt that way. I feel US banks offer better long term value still.

All your points are common knowledge and I was not disputing any of them except for the fact that I did not say that a 4.7% yield is unsustainable; just not as attractive as 7-9%. The point is, what has changed since the yields were 7%+, not much. I had as much confidence in the dividend then as I do now. These should be bought when fear is commonplace not when euphoria overshoots on the upside. Any return on investment in these slow growth entities has been diminished significantly since Feb-March.

Trading Under Book Value

Gino I think you are oversimplifying. Price to book is not simply a reflection of financial wherewithall (free cash flow etc.). The ratio also reflects the earning power of assets that contribute to book. A tech firm will always have a higher price to book than a resource firm, regardless of their balance sheet.

Bank Dividends Braking or Gearing Down

The title should be changed. It is actually "bank dividends braking or gearing down" on my website.

Bank Dividends Braking or Gearing Down

The title should be changed. It is actually "bank dividends braking or gearing down" on my website.