September 2, 2012 Comments

Canadian Western Bank is updated and rated (higher) Buy at $28.13. This has been a steady performer over the years. It is up 9.0% this year and that is in addition to a modest dividend yield of 2.3%. Since we first looked at it 13 years ago (and rated it a Strong Buy at that time) it has risen a total of 470%. I don’t expect that kind of performance over the next decade, but I would be surprised if it failed to at least double in price over the next decade. But it will have its downs as well as ups over that period as well. Before to read the full report.

Canadian Western Bank also has a preferred share.. This is updated and rated Sell at $26.92. The yield appears quite attractive at about 6.7%. However it seems almost certain the bank will redeem these shares at $25 on April 30, 2014. Some investors may not be aware of the redemption and so the share price may remain somewhat elevated. In 2012 it had declined 1.6%, but still have a decent annualized return of about 5%. The current price appears to reflect an expected yield of about 2.4% and we don’t consider that to be an attractive yield for a bank preferred share. Possibly those who have a need for the cash around May of 2014 would consider it a reasonable investment.