Thursday, September 23, 2010

Canada has a Better Housing Market than the US

According to a recent article by KIF Capital Management, Canada generally doesn't use 30 year fixed mortgages; most are 25 years and generally reset the interest rate every five years. In addition, there is no Canadian Fannie Mae or Freddie Mac (FMCC.OB). This makes for a more robust housing and mortgage market than what the United States has been experiencing.

It also means that Canadian banks may be in better financial shape than US banks. One of the nice features of Canadian bank stocks is the high dividend. There are over half a dozen Canada banks with yields ranging from 3% to 5.5%. For example, Canadian Imperial Bank of Commerce (CM), carrying a price to earnings ratio of 11.7, pays a generous yield of 4.7%.Earnings for the latest quarter were up 47.5% on a 13.8% increase in revenues.

Another high yielder is Bank of Nova Scotia (BNS), with a PE ratio of 14.3 and providing a 3.7% yield to investors. The company reported an earnings increase of 14.10% for the latest quarter on a 8.9% increase in revenues.

If you are interested in other opportunities north of the border, check out the free list of high yield Canada stocks at

Disclosure: Author did not own any of the above at the time the article was written.


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