Canada's National Bank Soars to 165% Gain: Is it Undervalued?

National Bank of Canada has delivered an impressive share price run in recent years, returning 165.2% over the past five years.

This significant growth puts pressure on whether the underlying return on capital can support such a substantial share price performance.

The bank's planned issuance of Series 52 institutional preferred shares may provide additional capital flexibility and influence how much it can reinvest in businesses driving future returns on equity.

Looking at National Bank of Canada through its earnings instead reveals a different valuation story, with a Price-to-Earnings (P/E) ratio of 17.5x.