Written by Joey Frenette at The Motley Fool Canada
The Canadian banks could really use some sort of catalyst after hovering around in limbo for quite a while. While I think that long-term passive-income investors will do well by picking any one of the so-called Big Six banks at today’s valuations, I think there’s a better risk/reward scenario to be had with some of the group’s more undervalued names. Indeed, we’ll check out the top two of the six in this piece, which, I believe, can outperform over the next two to three years.
Of course, the magnitude of headwinds hitting the Canadian banks could last for many quarters to come. That means earnings weighed down by further provisions for credit losses, among other issues that have been caused big bank stocks to sag. One has to imagine that many of the headwinds (many of which have been on investor radars for years) are already factored into the share…
