Mike, are you not tired of writing about Canadian banks?
Of course not! First, they remain amongst my favorite dividend stocks ever. As a passionate investor, I will never get tired discussing my favorite picks! Second, I will not review their earnings this time. Rather, we will look at how they fit in your portfolio for the next 20 years.
Canadian banks are amazing; they have outperformed the Canadian market for the past 5, 10, 15, probably 25 years. Unfortunately, they were not created equal. That's a myth.
Technically, if you take any of the first six, you'll do well. But what if I tell you that Scotiabank (BNS) [BNS.TO] gave you a 60% total return over the past 10 years while National Bank of Canada (OTCPK:NTIOF) [NA.TO] has provided you with 250% overall return? Do you really think that both are equally weighted in your portfolio? It would be like telling me, "Mike, if you invest in any tech stocks, you'll do fine." That's not true. Some tech stocks are good, some are average, and some are just crap.
So here's my Canadian banks ranking - from number six to one - for the next 20 years. Let me tell you upfront: Laurentian Bank and Canadian Western Bank are not part of the list. The investment thesis for each says it all.
Laurentian Bank Investment Thesis
If you are looking for an overlooked bank with chances of P/E expansion, Laurentian Bank (OTCPK:LRCDF) [LB.TO] could be your candidate. This small bank is trading at a lower P/E than its peers (there are reasons why) and pays a solid dividend yield to keep you waiting patiently. Personally, I dislike this bank as it lacks growth vectors due to its small size and lack of presence in the wealth management market. The problem is that LB lacks long-term
