Best Canadian Banks to Invest in This Year

For many years, the Canadian banking sector has been synonymous with safety and security. Despite underperforming and yielding underwhelming results in the past year, largely due to the pandemic, it’s still resulting in substantial long-term investments.

Regardless of whether you’re a hot-shot investor or you’re simply considering potential profits in the foreseeable future, your bank of choice plays a crucial role in the overall outcome.

Deciding where to put your money on the line is certainly not an easy choice which is why we’ve assembled a shortlist of the best Canadian banks to invest in, based on the latest stats and data.

What are the Best Canadian Banks for Investing?

best-canadian-banks

 

Best Canadian Banks to Invest in

Let’s dive into the world of money and finance and find the perfect bank for you to invest in!

  1. National Bank Of Canada

  • Ticker: NA
  • Dividend Yield: 3.38%
  • Market Cap: $35.06 billion
  • Total Assets: $356 billion

With its headquarters located in Montreal, Quebec, the National Bank of Canada started off small when it was first established. However, it’s grown exponentially over the past two decades, slowly but surely becoming the sixth largest bank stocks in Canada.

The average dividend percentage has steadily increased throughout ten consecutive years, which is why investors are flocking to this bank without a second thought.

The bank itself offers a whole bunch of personal and commercial banking services, such as insurance, asset and retirement management, mortgages, loans, foreign currency exchange and so much more.

Spanning across 400 branches and topping 26.000 employees, its impressive capital growth has turned it into one of the best Canadian bank stocks today.

  1. Royal Bank Of Canada (RBC)

  • Ticker: RY
  • Dividend Yield: 3.27%
  • Market Cap: $209.48 billion
  • Total Assets: $1.71 trillion

Looking at market cap numbers, you’ll notice that the Royal bank is by far the largest in the country. Fun fact, it’s had a 12.29% year-to-year increase when it comes to annual revenue and earnings.

This, in turn, is quite a favorable scenario for both present and future investors who are looking to cash in on Canadian financial stocks.

Despite having its headquarters in Toronto, the Royal Bank has managed to garner a substantial presence worldwide, with financial services being available in 34 countries in total. It boasts a massive workforce of about 85.000 employees across 1.300 branches, which is certainly an admirable feat.

With its long-standing history and consistent growth over the years, the Royal Bank has surely earned its place among the top Canadian bank stocks to invest in.

  1. Toronto Dominion Bank (TD)

  • Ticker: TD
  • Dividend Yield: 3.37%
  • Market Cap: $192.44 billion
  • Total Assets: $1.73 trillion

If there’s a contender that rivals the Royal Bank in terms of the annual growth rate, then that’s Toronto Dominion, with a close 9.86%. With its roots in, well, Toronto, the bank operates across 1.100 branches which are supported by approximately 89.000 employees.

Its stellar dividend growth rate is one of the primary reasons why it’s considered to be among the best bank stocks in Canada at the moment.

Customers have the opportunity to choose from a multitude of different services, including retail and corporate banking, insurance policies, asset distribution and investment planning. Plus, the TD stock price in Canada comes with a lower price tag which means you’re getting great value for money if you choose to invest in this particular institution.

  1. Canadian Imperial Bank Of Commerce (CIBC)

  • Ticker: CM
  • Dividend Yield: 3.93%
  • Market Cap: $74.36 billion
  • Total Assets: $837.68 billion

Following up with another Toronto-based money-making machine, the CIBC offers a ‘juicier’ dividend yield as opposed to its competitors. It’s also the fifth largest bank up north, specializing in 1.200 branches and housing 44.000 employees.

Based on its current track record, it doesn’t seem like it’ll come to a halt anytime soon either.

Throughout the years, the CIBC has cemented its position among investors as one of the best bank stocks to buy in Canada. Its target audience consists of millions of individual, business and corporate clients around the globe who are seeking professional advice for wealth management, commercial banking services, capital markets and steady growth across a number of platforms.

Even if you’re unsure about your initial investment, rest assured that the CIBC has the potential of outshining its competition eventually. You’re bound to get your money’s worth of investments.

  1. Bank Of Montreal (BMO)

  • Ticker: BMO
  • Dividend Yield: 3.59%
  • Market Cap: $96.84 billion
  • Total Assets: $988.17 billion

Despite being the oldest bank of the bunch, BMO is still going strong among frontrunners for best banks in Canada for investing. The average dividend yield has increased in the last eight years, contributing to a strong presence in the regional marketplace.

Its headquarters is located in, you guessed it, Montreal though its services are available through 877 branches with around 43.000 experts working on the case. The company’s main focus is on personal and retail banking, asset management, government funding and investment proposals.

According to the statistics, BMO has managed to maintain a steady net income and revenue, which has definitely helped peak investor’s interest. The bank shows an admirable retention rate that will likely result in long-term holding and favorable Canadian bank stock prices.

  1. Bank Of Nova Scotia (Scotiabank)

  • Ticker: BNS
  • Dividend Yield: 4.28%
  • Market Cap: $114.27 billion
  • Total Assets: $942.31 billion

Out of all the Canadian bank dividends out there, Scotiabank certainly tops the list with a jaw-dropping 4.28% annually. Despite being the third largest bank by market capitalization, it’s managed to bounce back and pay off investors in an unprecedented fashion.

The bank’s network encompasses roughly 950 domestic branches and 1.300 overseas, bringing the final tally of total employees to a staggering 89.000. Evidently, the company has been able to satisfy customers from around the world with its top-tier service and undeniable professionalism.

As intriguing as all that data is, it comes with a price. A stock price, if you will. The initial investment deposit required has undergone a significant bump in the past year, rounding out to around 43%. Although it’s a heftier investment right off the bat, it pays off in the long run.

Bank Stocks at a Glance

If you consider yourself a stocks newbie, we answer a couple of stocks-related questions below. Let’s take a look at them.

What Are Bank Stocks?

Essentially, financial stocks are shares that are a part of the institution. Stocks can be transferred from one owner to another as personal property. Holding shares in a bank allows you to profit from your initial investment and get a return on your assets (ROA).

How to Buy the Best Canadian Bank Stocks?

It’s actually easier than you’d think. First, you need to find a reliable stock broker to gain access to the Toronto Stock Exchange through a trading platform. Alternatively, you can purchase shares through exchange-traded funds (EFTs) or other Canadian stock exchanges.

Your next step will be to figure out how much money you’re willing to invest and choose a bank that matches your interests. You can easily do this online through your broker’s trading platform.

Wrapping Up

All things considered, there’s no straightforward answer to the best Canadian bank stock debate. The system is fickle and constantly fluctuating, which means it’s difficult to predict how things could play off.

But with careful planning, informed decisions and thoughtful consideration of the best Canadian banks to invest in, it’s definitely worth your time and effort.

FAQ

Which Canadian bank Pays the highest dividend?

Looking at the current stats in our Canadian bank stocks comparison guide, it’s safe to say that the Bank of Nova Scotia comfortably leads the race with a 4.28% dividend yield.

Are Canadian banks a good investment?

Seeing as banks are a constant presence in our society, investing in that market seems like a low-risk endeavor with a steady flow of income.

ABOUT AUTHOR

Despite her formal background in linguistics, Maja has always been fascinated by the world of finance. She has spent years and years analyzing the market, including trades, investments, pitfalls to avoid as well as the stock exchange. As of recent, she has been studying some non-mainstream stocks in Canada. When I’m not immersed in numbers, I like to spend time with my dog and plan my next trip.

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