Four bank stocks to deposit investment capital

These financial picks provide diversification and healthy dividends, but make sure the price is right before buying, Morningstar analyst says.

Vikram Barhat 10 November, 2015 | 6:00PM
Facebook Twitter LinkedIn

Economic uncertainty, oil price rout and a weak loonie notwithstanding, leading Canadian banks have posted strong profit growth in the third quarter. Similarly, banks south of the border have reported a healthy quarterly profit shored up by an uptick in job growth, consumer spending and lending activity.

After bouncing back from the 2008 financial crisis, bank stocks have continued to provide high returns in the lower-risk and highly regulated financial markets on both sides of the border. Further, North American banks have become increasingly diversified both in terms of their geographic footprint and products and services. This has afforded banks new opportunities and market shares that have helped outweigh any slowdown in one market and stay profitable, reflected by healthy dividend payouts.

There is the perception that the banks, especially those in Canada, are significantly exposed to the nation’s ailing energy sector and a dangerously frothy housing market. However, Morningstar analyst Dan Werner says Canadian banks have a limited exposure to the energy sector, and that there are no identifiable catalysts in sight that would have a negative impact upon the housing sector.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free
Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Bank of Montreal132.68 CAD1.51Rating
Capital One Financial Corp168.38 USD1.43Rating
Royal Bank of Canada130.66 CAD0.61Rating
The Toronto-Dominion Bank87.01 CAD1.75Rating

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy