- Laurentian Bank reduced its loan loss provision in Q3, resulting in a strong EPS and dividend coverage.
- The 5.5% dividend yield is still attractive and the low payout ratio means the bank can continue to build its CET1 capital.
- Almost half of the loan book consists of residential mortgages, of which the majority is insured. The visibility of the interest income should help Laurentian Bank.
- I think the dividend is safe and could be hiked from next year on - if the loan loss provisions stabilize at the current levels.
For further details see:
Laurentian Bank: A 5.5% Dividend Yield While Trading At Just 9X Earnings