Its abundance of resources and location on the Great Lakes have made Ontario an economic powerhouse. Canada's capital, Ottawa can be found there, as well as its largest city, Toronto, which is also Canada's financial hub. Seven of Ontario's eight largest companies are financial institutions, and Toronto is also the home of one of the largest stock exchanges in the world. When the Motley Fool took a look at stock investment opportunities in Ontario this past June, three of the companies they focused on were financial institutions: Royal Bank of Canada (NYSE: RY), Manulife Financial Corp. (NYSE: MFC) and Toronto-Dominion Bank (NYSE: TD). Considering the credit crunch and the weakness of the U.S. dollar, I thought it might be interesting to see how those companies are faring now.
The Royal Bank of Canada, also known as RBC Financial Group, is Canada's largest financial institution. It has 1,300 domestic locations and offices in 30 countries. In September, RBC's Gord Nixon won Canada's Outstanding CEO of the Year award for 2007. More recently, RBC announced the acquisition of a Caribbean bank, and it was one of four Canadian banks affected by restructuring at VISA. With RBC's five-year earnings per share growth rate of 26.5% (better than the S&P 500), the consensus recommendation of analysts surveyed by Thomson Financial is to buy RBC, despite missing earnings expectations for the past two quarters. RBC's share price is near an all-time high on the NYSE, closing Thursday at $57.09 on the NYSE. RBC will release its next quarterly report on November 30.
Manulife Financial is the holding company for The Manufacturers Life Insurance Company, which offers individual life insurance, group health and pension plans, and variable annuities. Manulife is also Canada's top commercial mortgage lender. Manulife beat Wall Street's earnings expectations in the previous quarter, and has a 22.8% five-year earnings per share growth rate. Yet, the consensus of analysts of surveyed by Thomson Financial is to hold MFC. In September, though, Moody's upgraded MFC for, among other things, "success in continually strengthening the company's diversified and predictable earnings profile." Jim Cramer is bullish on MFC. Manulife's share price reached an all-time high on the NYSE of $43.47 on Thursday. One item of note: Iowa Senator Charles Grassley, senior Republican on the Senate Finance Committee, has asked major insurers, including Manulife, for data related to complaints about long-term care claim denials.
Toronto-Dominion Bank, also know as TD Bank or TD Financial Group, is Canada's second largest bank. It offers retail banking services, commercial financial services, and securities and investment banking, and recently was voted one of Canada's best employers. Its U.S. subsidiary is TD Banknorth. The weak U.S. dollar benefited TD in its acquisition of New Jersey-based Commerce Bancorp. Some interpret this acquisition as a signal other financial mergers and acquisitions to come. Like RBC, TD was also affected by restructuring of VISA. The consensus of analysts of surveyed by Thomson Financial that TD is a buy. It beat Wall Street expectations in the past four quarters and had five-year earnings per share growth of 23.6%. TD's share price reached a five-year high of $77.63 at the end of September, and closed at $74.69 Thursday.
[photo ilkerender]I do not own shares in these stocks. As always, be sure to do your homework before investing.
See also: Investing in Oregon, Investing in New Jersey, and Investing in Wisconsin.
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Reader Comments (Page 1 of 1)
12-28-2007 @ 11:11PM
Paul Fraser said...
I'm a commercial fisherman fighting the Royal Bank of Canada, (RBC Centura) over a $100,000 loan mistake. I lost my home, fishing vessel and equipment. I need your support to fight this corporate bully. RBC contacts are posted on my website http://www.corporatebully.ca Thanks, Paul Fraser.