CA - National Bank of Canada: The Best Of The Big 6 Canadian Banks

2024-03-07 13:07:19 ET

Summary

• The National Bank of Canada reported another strong quarter, consistent with its steady results across all of its segments.
• The wealth management and financial markets segments are a source for long-term growth, but even the P&C segment has been experiencing modest loan growth in its portfolio.
• While some investors are worried about higher credit losses in 2024, I think fears are overblown and that the valuation remains attractive today.

Please note all $ figures in , not , unless otherwise stated.

Introduction

Unlike in the U.S. where the largest companies on the stock exchange are dominated by large technology companies, in Canada, the largest companies are mostly banks. Making up 31% of the TSX, the Big 6 banks have been stellar performers for investors who've held on for the long run. In the last 20 years, while the TSX has delivered a total return of 329% (or 7.5% on an annualized basis), the banks have delivered returns considerably higher. In the case of the National Bank of Canada ( NA:CA ), the best-performing of the group, the total return to shareholders has been more than a 10-fold increase in the last two decades for an annualized return of 12.6%....

For further details see: