Other banks or other high yield suggestions for proxies?
I have lots of BNS.
Thank you.
The big six Canadian banks are likely all the best proxies for each other. Other smaller financial names in Canada such as EQB, GSY, etc. do not have nearly the same level of scale or size as the big six.
As a proxy for TD, we feel that BMO is a good comparison, however, we would give RY the slight edge due to its high level of exposure to the US. TD and RY also have similar volatility profiles, however, on a valuation, margin profile, and dividend yield basis, TD and BMO are more similar.
RY has been the best performer of the three historically, but our past studies have shown that often times the weakest big six Canadian bank in any given year often outperforms in the following year. Mid-term we feel that TD has some catching up to do and can do well, however, over the long-term RY is the larger and more conservative bet.