Five Canadian Bank Stocks Offer Great Opportunity

It is no secret that investing in Canadian Bank Stocks is a great way to get ever increasing dividends and solid earnings year after year. The Canadian government makes it very difficult for foreign banks to do business in Canada, let alone compete with the established branch networks that exist already.

However, these Canadian government regulations are not the only reasons that Canadian Bank Stocks are a necessary part of a dividend growth portfolio. Let’s take a quick look at some of the larger Canadian Bank Stocks and see what kind of value we can uncover:

1. Royal Bank (RY)

Price - $55.41 [USD]

ROE - 24.49

Dividend Yield - 3.0 %

5 Year Dividend Growth Rate - 15.52%

Beta - 0.69

2. Scotia Bank (BNS)

Price - $49.65 [USD]

ROE - 22.37

Dividend Yield - 3.39%

5 Year Dividend Growth Rate - 19.33%

Beta - 0.60

3. Toronto Dominon (TD)

Price - $69.90 [USD]

ROE - 16.57

Dividend Yield - 2.91%

5 Year Dividend Growth Rate - 10.31%

Beta - 1.18

4. Bank of Montreal (BMO)

Price - $66.99 [USD]

ROE - 14.63

Dividend Yield - 3.62%

5 Year Dividend Growth Rate - 15.07%

Beta - 0.48

5. National Bank of Canada [NA.TO]

Price - $63.12 [CAD]

ROE - 20.29

Dividend Yield - 3.80%

5 Year Dividend Growth Rate - 19.04

Beta - 0.56

As we can see, Canadian bank stocks offer a great opportunity to cash in on increasing dividends and provide a superior return on equity versus the industry as a whole.
These companies are constantly expanding into international markets in order to bolster revenues and diversify their lending portfolios.

Scotiabank [BNS], my favorite Canadian bank stock, has expanded very successfully through a methodical plan to increase operations in South America. While some other banks have focused on expansion into the crowded United States marketplace, Scotiabank has quietly set up successful branch networks in developing countries.

For those of you looking to expand your portfolio to include some additional financial stocks, have a look north of the border. You could be very surprised at what you might find!

Comments

[kurt walter:]

Originally bought BMO for $30.00.

2007 Jul 23 11:06 AM

[O.M. Jonson:]

Hi Tyler,

Great article. While returns haven't been great since you wrote this article, I heartily agree Canadian bank stocks are a fantastic long-term investment. Check out my new blog -- there's some compelling evidence there that BMO in particular is poised for big gains over the next few years.

Good luck with your investing!
Mark

2008 Sep 14 01:58 PM