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The Canadian bank scene has undergone a heck of a lot of volatility in recent years. While many Canadians may have given up on the group amid their lacklustre performances of late, I’d argue that value hunters should be more than willing to give the batch (known as the Big Six banks) the benefit of the doubt. The group is trading at a nice discount relative to historical averages, with dividend yields that are very generous at current levels.
Of course, there are headwinds that will persist through 2024, and that could weigh heavily on earnings growth prospects. A recession could bring forth more provisions, and the big bank stocks may prove pricer than they look on the surface. In any case, I think it’s wrong to view the group as a value trap.
Expectations are already quite muted for coming quarters, after all. And though the big bank stocks could really use some sort of catalyst to propel them…
