The Motley Fool

Banking on Higher Dividend Yields? Try These 3 Canadian Banks

When it comes to investing, some focus on consistent, regular dividend raises. Others concern themselves mainly with yields. If you’re in the latter group, consider these three Canadian banks with yields greater than 4%.

1. Bank of Montreal

Bank of Montreal (TSX: BMO)(NYSE: BMO) is a diversified financial services provider with a retail focus. More than 75% of its revenue is from its retail operations. As of April 30, 2014, Bank of Montreal is the second-largest Canadian bank by retail branches in Canada and the United States.

Its annual dividend declared per share is $3.12. Its dividend yield is 4.10% and its five-year average dividend yield is 4.60%. Last week, Bank of Montreal declared a quarterly dividend of $0.78 per share on paid-up common shares for Q3 fiscal year 2014. This represents a $0.02 increase from the prior quarter.

2. Canadian Imperial Bank of Commerce

Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM) operates through its retail and business banking and wealth management and wholesale banking units. Its 2013 total revenue was $12.8 billion and its 2013 net income was $3.4 billion. Retail and business banking accounted for 65% of the bank’s revenue.

Its dividend yield is 4.2% and its five-year average dividend yield is 4.60%. Last week, the bank announced a quarterly dividend increase of $0.02 per common share to $1.00 per share for the quarter ending July 31, 2014. This brings its dividend rate to $4.00.

3. National Bank of Canada

National Bank of Canada (TSX: NA) is the sixth-largest bank in Canada and is the leading bank in Quebec.

National Bank of Canada’s dividend yield is 4.20%. Its five-year average dividend yield is 7.10% and its dividend rate is $1.92. Last week, its board announced an increase of the dividend on its common shares from $0.46 to $0.48 per common share for the quarter ending July 31, 2014.

Louis Vachon, President and CEO, said, “National Bank delivered another good quarter with strong performance from the Wealth Management and P&C Banking segments. With the quality of our results and our continuous efforts with the One client, one bank initiative, we are pleased to increase the quarterly dividend by 4%.”

As Bloomberg recently reported, “Canada’s six biggest banks boast 12-month dividend yields of 3.5 percent to 4.2 percent, higher than any U.S. bank with a market value of at least $10 billion.” Consider the above-mentioned banks as possible additions to your income portfolio.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Michael Ugulini has no positions in any of the companies mentioned in this article.

 

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.