Diversification of Canadian Banks – Take Two

Last week, I posted an article that took a deep dive on the geographical diversification of the Big Five Canadian banks – Royal Bank of Canada (RY), Toronto-Dominion Bank (TD), Bank of Nova Scotia (BNS), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CM). The article can be found here.

In that article, I presented data for geographical revenue diversification of the banks – and presented 10-year trend charts.

Revenue provides only part of the story, and I decided to continue digging and pull the earnings numbers as well. Unfortunately, the earnings presented in the annual reports are broken down by segment and not geographical regions, so there is no apple-to-apple comparison to see which geography is earning the most. However, looking at the segment breakdown can also provide some insight on which direction a bank is headed.

For the sake of completeness, I am also including the charts for geographical revenue diversification in addition to the earnings-by-segment charts. Enjoy.

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Geographical Diversification Of Canadian Banks

The fiscal year for the Big Five Canadian banks ends in October. With the end of the year, and a delay of a few weeks, companies release their annual reports which give investors a clear picture of the overall operations with breakdown in revenue and earnings. This is vital information for long term investors and provides visibility into the operations.

Management may say one thing or another, but the numbers always speak for themselves — and confirms whether management is executing the path that is paved by the ideas generated in order to look for stability and growth. This article will take a look at the state of affairs of the Big Five Canadian banks and their geographical diversification. The five banks take the lion’s share of the Canadian financial markets and also have sizeable operations in U.S. and overseas markets. The data for each of the banks presented below has been extracted for each company’s respective annual reports for the year.

CdnBanks - Geographical Diversification 2015

In addition to the revenue diversification for the year 2015, this article takes a look at the trends of how the geographical diversification changed over a course of past ten years.

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Sector Overview – Canadian Banks

This article provides a sector overview of the Canadian banks. The Canadian banks are counted amongst the safest and most stable financial institutions of the world and have a proven track record of being conservative and focusing on long term growth and prosperity. It is no wonder that the banks routinely find themselves in portfolios of most long term focused investors and make for a great core position. The banks are also great for income focused investors as they paid a good starting dividend and also raise those dividends regularly. Now that Canada is facing a lot of headwinds in the economy, most bank stocks have been beaten down and provide a great opportunity to initiate/add to the position.

My previous articles in the Sector Overview garnered plenty of interest as you readers found it valuable. So, without further ado, here’s a sector overview for Canadian banks.

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Bank of Nova Scotia Dividend Stock Analysis 2015

Scotiabank

Bank of Nova Scotia (BNS) is one of the Canadian banks – the third largest of the Big Five. Scotiabank, as it is more commonly known, has the most international presence of the Canadian banks with exposure in 55 countries outside Canada. The Canadian banks are regarded as some of the safest financial institutions in the world. The companies have a long track record of being conservative and focused on long-term stability and prosperity.

BNS has existed as an institution since 1832 and paid dividends since the same year – an unbroken chain and no dividend cut. It makes for a great core position in any investor’s portfolio. There are plenty of headwinds facing the Canadian economy and the banks – including a recession, weak Canadian dollar, possibility of a housing bubble and potential crash, which has led to very attractive valuation levels for investors looking to initiate or add to their positions. This article takes a closer look at the stock and provides a full dividend stock analysis.

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Bank of Montreal Dividend Stock Analysis 2015

BMO

Bank of Montreal (BMO) is one of the Big Five Canadian banks and is the oldest Canadian bank. Although the market cap makes it the second smallest of the Big Five, BMO has a strong history that has stood the test of time since the early 19th century. The Canadian banks are regarded as some of the safest financial institutions in the world. The companies have a long track record of being conservative and focused on long-term stability and prosperity.

BMO has existed as an institution since 1817 and paid dividends since 1829, and makes for a great core position in any investor’s portfolio. There are plenty of headwinds facing the Canadian economy and the banks — including a recession, weak Canadian dollar, possibility of a housing bubble and potential crash, which has lead to very attractive valuation levels for investors looking to initiate or add to their positions. This article takes a closer look at the stock and provides a full dividend stock analysis.

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