Investing in Canadian Bank Stocks can be one of the best decisions that Canadians make.
Whether you’re a beginner, intermediate or advanced investor, bank stocks can provide investors with consistent and predictable dividend income.
Canadian banks offer investors high yield and many of them fall under the dividend aristocrat category.
This means they have been consistently growing and paying out dividends to their shareholders for at least 25 years straight.
If you live and work in Canada, there is a strong chance that you bank with one of the Big 5 Banks.
So if you’re a customer, why not also be an investor and benefit from the upside of the Canadian banking sector.
Below, we will present the 5 Best Canadian Bank Stocks to buy in 2023!
Best Canadian Bank Stocks for 2023
- Royal Bank of Canada
- Toronto-Dominion Bank
- Bank of Montreal
- The Bank of Nova Scotia
- Canadian Imperial Bank of Commerce
1. Royal Bank of Canada (TSE: RY.TO)
- Ticker: RY.TO
- Dividend Yield: 4.05%
- 10-Yr Dividend Growth Rate: 7.71%
- Payout Frequency: Quarterly
- Payout Ratio: 48.33%
- Market Cap: $181.08 Billion
Royal Bank of Canada is a multinational financial services company and Canada’s largest bank by market capitalization.
The company serves more than 17 million clients and has more than $1.0 Trillion in assets under management (AUM). For more than 150, they have been recognized as one of Canada’s best managed companies.
In 2022, the company had annual revenues of $52.07 Billion.
With a yield of over 4.00%, RBC is a strong pick for Canada’s best bank stocks.
2. Toronto-Dominion Bank (TSE: TD.TO)
- Ticker: TD.TO
- Dividend Yield: 4.64%
- 10-Yr Dividend Growth Rate: 6.24%
- Payout Frequency: Quarterly
- Payout Ratio: 43.89%
- Market Cap: $145.07 Billion
Toronto-Dominion Bank is a multinational financial services company and Canada’s second largest bank by market capitalization.
The company serves more than 27 million clients worldwide and has more than $400 Billion in assets under management (AUM). In Canada, the company operates under TD Canada Trust, Business Banking and its wholly owned subsidiary MBNA. MBNA is a credit card business that was purchased by TD Canada in 2011.
In 2022, the company had annual revenues of $48.71 Billion.
With a current dividend yield of 4.64% and mid single-digit dividend growth, TD Bank is an attractive option for Canadian investors.
3. Bank of Montreal (TSE: BMO.TO)
- Ticker: BMO.TO
- Dividend Yield: 4.70%
- 10-Yr Dividend Growth Rate: 5.48%
- Payout Frequency: Quarterly
- Payout Ratio: 40.74%
- Market Cap: $85.50 Billion
Bank of Montreal is a Canadian multinational financial services company headquartered in Montreal, Quebec, Canada.
The company serves more than 12 million clients worldwide and has approximately $321 Billion in assets under management (AUM). They are the 8th largest bank in North America and operate under 6 branches; BMO Personal Banking, BMO Private Wealth, BMO Business, BMO Commercial, BMO Capital and BMO Asset Management.
In 2022, the company had annual revenues of $34.74 Billion.
With a current dividend yield of 4.70% and relatively low payout ratio, Bank of Montreal is a top Canadian bank stock to consider in 2023.
4. Bank of Nova Scotia (TSE: BNS.TO)
- Ticker: BNS.TO
- Dividend Yield: 6.02%
- 10-Yr Dividend Growth Rate: 3.02%
- Payout Frequency: Quarterly
- Payout Ratio: 56.49%
- Market Cap: $80.43 Billion
Bank of Nova Scotia is a multinational financial services company and is a part of Canada’s Big 5 Banks.
The company employs more than 97,000 people and serves more than 17 million clients worldwide. Scotiabank has approximately $350 Billion in assets under management (AUM).
In 2022, the company had annual revenues of $36.40 Billion.
Scotiabank is a great Canadian bank stock to own over the next decade. With a yield of 6.02% and P/E ratio of 9.53, makes it attractive compared to industry peers.
5. Canadian Imperial Bank of Commerce (TSE: CM.TO)
- Ticker: CM.TO
- Dividend Yield: 5.87%
- 10-Yr Dividend Growth Rate: 4.29%
- Payout Frequency: Quarterly
- Payout Ratio: 65.51%
- Market Cap: $52.83 Billion
Canadian Imperial Bank of Commerce is a multinational financial services company and is a part of Canada’s Big 5 Banks.
The company serves more than 13 million clients and employs more than 50,000 people across North America. CIBC has approximately $320 Billion in assets under management (AUM).
In 2022, the company had annual revenues of $24.37 Billion.
With a current dividend yield of 5.87%, CIBC is a great option for income oriented investors.
Are Canadian Banks Safe?
With the recent banking crisis in the United States and the collapse of Silicon Valley Bank, investors are on the fence about bank stocks.
In the first quarter of 2023, the U.S. banking sector saw record outflows of more than $100 Billion amid the regional banking collapse.
But how does this affect the Canadian banking sector?
Well, the truth is that the Canadian banking sector is much more stringent and regulations are much tighter.
However, now might be a good time to consider investing in Canadian bank stocks.
If you want to be on the safer side then you should consider RBC or TD Bank. You can also consider the higher yield Canadian bank stocks like Scotiabank, CIBC, and BMO.
Disclosure: The author holds no position mentioned in this article. Freedom Stocks has a disclosure policy.
