If you’re looking for a stable banking stock that pays a high dividend yield without billions of dollars in regulatory headaches and a sluggish mortgage lending market, the winning play may be to check out Canadian bank stocks.
Although Canadian banks face headwinds from mortgage lending, they are differentiating their offerings, expanding into higher growth areas like wealth management and boosting fee income.
On Friday, Royal Bank of Canada (RY) kicks off third-quarter earnings reports of the so-called “Big Six” Canadian banks. The other five banks — Bank of Montreal (BMO), Bank of Nova Scotia (BNS), National Bank of Canada (NTIOF), Canadian Imperial Bank of Commerce (CM) and Toronto Dominion Bank (TD) — report their quarterly earnings next week.
The bad news: some analysts are concerned that weak lending volume — particularly given cold-weather delays in home purchases — could weigh on earnings.
Although Canadian bank stocks have seen a run-up in price this year, the fundamentals and growth prospects are strong — I think these stocks still have further to fly. But not all Canadian bank stocks are alike — and the business mix, as well as reliable dividend payouts and high yields — must be considered. Here are three high-yield Canadian bank stocks to buy now: