An Introduction to Investing in Canadian Banks for Americans

Canadian banks are making money, rated the highest in the world, and are often conservative enough for any investor. Yet they often still have prospects beyond Canada. Let’s take a look at these top five banks in Canada.

  1. Royal Bank of Canada (RY)– Recently sold money losing US assets to PNC Financial Services which is being judged negatively. Often seen as the most reliable Canadian bank. Most expensive value though.
  2. Bank of Nova Scotia Scotia Bank (BNS) – Usually considered most used by Canadians along with RBC. Has growing exposure in Latin America and a P/E of 11. What a steal!
  3. Bank of Montreal (BMO) – The highest dividend that keeps increasing! This is the hottest Canadian bank stock for investors right now for its value and prospects.
  4. Toronto Dominion Bank (TD) – Known for its move into the U.S. With TD Ameritrade. Excellent for growth prospects and innovation within Canadian conservative banking. Also sports a great dividend.
  5. Canadian Imperial Bank of Commerce CIBC (CM) – Has a Thompsons rating of 10. It’s excellent exposure in world markets along with an awesome dividend at 3.63% and a P/E of 10 is unreal! Often overlooked. It’s at value!

Canadian bank stocks offer an excellent opportunity at a safe investment with an excellent dividend. They avoided the Great Recession through conservative practices in a safe environment. Along with honest valuations, modest P/E’s and a growing dividend they are stocks to consider retiring with.

They are all on sale now due in large part to a global dump in banks, headlined by talking heads like Jim Cramer, who advises his viewers and readers each day to not touch banks, even though he has mentioned Canadian banks are the best. Thankfully, these Canadian banks were smart enough to avoid Greek debt, unlike Bank of America (BAC) and Huntington (HBAN), among others.

If you are a Canadian take advantage of these banks you know and use each day. Talk to an investment representative at your branch and discuss options for investing in them. Some of them are also available through powerful DRIP plans, offering an excellent vehicle for long term investment. Americans should justto get in on the action.