Royal Bank of Canada (USA) (RY), The Bank of Nova Scotia (USA) (BNS), Toronto-Dominion Bank (USA) (TD): Double Digit Gains in Cheap Banks

I believe the factors that make this stock the least attractive of the three are the higher debt-to-equity ratio at 2.6 and the lower five-year average return on equity at “only” 13.8% per year. Investors considering allocating capital here should keep in mind that a return on equity of almost 14% per year is nothing to be ashamed of for a bank with a market capitalization of almost $74 billion; it is just not quite as impressive as my other selections.

Final thoughts and reasonable actions

I don’t really know if the Canadian banking industry as a whole is exceptionally valued right now, or if I just happened to select three banks that are; but the three I have looked at here all seem to be compelling opportunities. Investors seeking high yields in solid banks doing business in a safe currency need look no further than these three large Canadian banks and should seriously consider adding positions now. If the Canadian dollar continues to appreciate against the U.S. currency, investors could do even better and face less risk than being exposed to businesses dealing primarily in U.S. dollars.

Ken McGaha has no position in any stocks mentioned. The Motley Fool recommends The Bank of Nova Scotia (USA).

The article Double Digit Gains in Cheap Banks originally appeared on Fool.com.

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