Valuation of BKWith some variations (premium, discount) the share price of BK largely reflects a leveraged porfolio of the six major Canadian banks (with a minor position in some US banks). Analysts are divided on the prospects for Canadian banks: some assume increases in interest rates will be positive for the banks, others see various headwinds. There are two ETFs which are largely similar to BK in that they hold portfolios of Canadian banks: ZEB and HEWB. Since Feb 7, when the banks started to slide, ZEB and HEWB have both lost around 11 %, while BK has lost less than 5%. The next dividend payout will probably be about a cent less than the current one, 0.1888. Although it goes against my instincts as an investor I should probably consider BK more of an income producer than a capital gains producer; moving in and out of BK is pretty hard to rime.
Given the continuing bloodbaths in the US markets (NASDAQ down more than 20%, etc) and similar moves in the Canadian markets cash might be the safest place, but as a retiree I need income. A leveraged investment in Canadian banks is probably reasonably safe, especially if it is associated wih high yields. BK is a major component of my portfolios, together with DGS, DF and some LBS.
For those who would like to follow the moves in BK, ZEB and HEWB, check here:
https://stockcharts.com/freecharts/perf.php?HEWB.TO,ZEB.TO,BK.TO