The Big Five Canadian banks are cheap today. They can become cheaper in this market downturn, but three, in particular, look especially attractive at these prices, including Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) that yields 5.3%.
Along with the market decline, the Big Five Canadian banks have also fallen. The banks, Royal Bank of Canada (TSX:RY)(NYSE:RY), Toronto-Dominion Bank (TSX:TD)(NYSE:TD), Bank of Nova Scotia, Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), and Bank of Montreal (TSX:BMO)(NYSE:BMO) have been in business for over a century. The banks are essential to the everyday operations of the Canadian economy, and the banks will be here for a very long time.
So, it’s a good strategy to buy these banks when they’re cheap.
The Big Five Canadian Banks’ Valuations
Comparing each bank’s current multiple to its historical normal multiple, Royal Bank, Bank of Nova Scotia, and Canadian Imperial Bank of Commerce are the best-valued banks at the moment. Indeed, Royal Bank and Bank of Nova Scotia have fallen the most among the group (over 10% in the past year).