Laurentian Bank of Canada (TSX:LB), one of the largest financial institutions in Canada, has held its own in 2015, falling less than 1% as the TSX Composite Index has fallen nearly 6%, and I think it could pare its losses and head significantly higher from this point forward. Let’s take a look at three reasons why this could happen and why you should buy the stock today.

1. Its strong earnings results could support a continued rally

On September 2, Laurentian Bank released strong earnings results for its three and nine-month periods ending on July 31, 2015, and its stock has responded by rising about 3% in the trading sessions since. Here’s a summary of eight of the most notable statistics from the first nine months of fiscal 2015 compared with the same period in fiscal 2014:

  1. Adjusted net income increased 5.9% to $128.07 million
  2. Adjusted earnings per share increased 6.4% to $4.17
  3. Revenue increased 2% to $665.48 million
  4. Total assets increased 9% to $39.56 billion
  5. Total loans and acceptances increased 5.1% to $28.66 billion
  6. Total deposits increased 6.6% to $25.8 billion
  7. Book value per share increased 5.2% to $47.45
  8. Adjusted return on common shareholders’ equity improved 20 basis points to 12%

2. Its stock trades at inexpensive forward valuations

At current levels, Laurentian Bank’s stock trades at just 8.9 times fiscal 2015’s estimated earnings per share of $5.61 and only 8.5 times fiscal 2016’s estimated earnings per share of $5.87, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 10.2 and the industry average multiple of 12.

I think the company’s stock could consistently trade at a fair multiple of at least 10, which would place its shares upwards of $56 by the conclusion of fiscal 2015 and upwards of $58 by the conclusion of fiscal 2016, representing upside of more than 12% and 16%, respectively, from today’s levels.

3. It has a 4.5% dividend yield and an active streak of annual increases

Laurentian Bank pays a quarterly dividend of $0.56 per share, or $2.24 per share annually, which gives its stock a 4.5% yield at current levels. Investors should also note that the company has increased its dividend for eight consecutive years, making it one of the top dividend-growth plays in the industry, and its strong operational performance could allow this streak to continue for the next several years. 

Should you add Laurentian Bank to your portfolio?

I think Laurentian Bank of Canada could be one of the market’s top performing stocks going forward. Its strong earnings results in the first nine months of fiscal 2015 could support a continued rally, its stock trades at inexpensive forward valuations, and it is both a high-dividend and dividend-growth play, which will amplify the potential returns for investors going forward. All Foolish investors should strongly consider establishing positions today.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.