Bank of Montreal (TSX:BMO)(NYSE:BMO) and Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) are both down more than 10% since the beginning of the year, and investors are wondering if this is a good time to buy the stocks.

Let’s take a look at the two banks to see if one deserves to be in your portfolio.

Bank of Montreal

Canada’s fourth-largest bank is often left out of the discussion when analysts debate which of the financial institutions is a better bet. With the Canadian economy facing headwinds, BMO’s balanced revenue stream and low-risk profile should command more respect.

BMO has 600 branches in the U.S. Midwest, and this division is delivering solid results. In fact, adjusted net income for the most recent quarter jumped 36% compared with last year. Every dollar of earnings south of the border currently converts to CAD$1.32, which provides a big boost to overall results. BMO’s American operations account for 18% of total profits.

Wealth management has also become a core segment of growth for the bank, with operations now located around the globe. Year-over-year net income rose 10% in the last quarter and the division contributed 18% of the company’s profit.

Many investors are concerned about risks in the Canadian oil and housing sectors.

BMO has $94.5 billion in Canadian residential mortgages on its books, with 60% of the portfolio insured. The loan-to-value ratio on the remaining mortgages is 58%.

As for energy risks, BMO has about 2% of its overall loan book exposed to the oil and gas sector.

BMO has a market cap of $46 billion, trades at 10 times forward earnings, and pays a 4.6% dividend.

Bank of Nova Scotia

Bank of Nova Scotia also offers investors a diversified revenue stream, but it has focused on Latin America instead of the U.S.

Over the past five years, Bank of Nova Scotia has spent about $7 billion to build a strong network in Mexico, Colombia, Chile, and Peru.

The countries form the core of the Pacific Alliance, an economic trade bloc set up to foster the free movement of goods, services, and capital among the member states. Most trade barriers have already been eliminated.

Bank of Nova Scotia reported 12% year-over-year loan growth in the Latin American operations. The international banking group accounts for more than 25% of the company’s earnings.

In Canada, Bank of Nova Scotia has $189 billion in residential mortgages, of which 48% are insured. The loan-to-value ratio on the remainder is 53%.

The company also has $15.8 billion, or about 3.4% of its total loan book, exposed to existing oil and gas loans. Undrawn oil and gas commitments represent another $13.5 billion.

Bank of Nova Scotia has a market cap of $71 billion, trades at 9.8 times forward earnings, and pays a 4.8% dividend.

Which should you buy?

Both banks are strong long-term investments and currently trade at attractive prices. At the moment, Bank of Montreal is probably a safer bet, given its lower exposure to both the oil sector and the Canadian housing market.

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Fool contributor Andrew Walker has no position in any stocks mentioned.