Stacking stocks that offer income is one path to peace of mind in a volatile market. Canadian bank stocks are popular because of their balance of growth and income and consistent profit, but today I want to look at three bank stocks that stand out for their hefty dividend payouts. All three are worth consideration as we move into September.
Laurentian Bank
Laurentian Bank (TSX: LB) is a regional bank based in Quebec. Shares have climbed 19.3% in 2019 as of close on August 29. Laurentian has managed to thrive in the face of a publicized short call from Steve Eisman.
In the third quarter, Laurentian saw profit fall to $47.8 million compared to $54.9 million in the prior year. For the first nine months of 2019, net income has dropped 24% to $131.4 million, and diluted earnings to share have fallen 27% to $2.88. Laurentian struggled due to lower year-over-year loan volumes as well as lower lending and deposit fees.
Still, Laurentian stock possesses a favourable price-to-earnings (P/E) ratio of 10.4 and a price-to-book (P/B) of 0.8. It last paid out a quarterly dividend of $0.66 per share, which represents an attractive 5.9% yield. The bank has achieved dividend growth for 11 consecutive years.
Canadian Imperial Bank of Commerce
Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM) stock shot up by the most it had in over a year in response to its third-quarter earnings report. I’d discussed why CIBC looked dirt cheap ahead of its earnings report last week. Shares have climbed 3.9% in 2019 so far.
In the third quarter, CIBC got a big boost from its U.S. Commercial Banking and Wealth Management segment. Adjusted net income in the segment rose 6% year over year to $182 million. This was due mostly to higher revenue. Canadian Personal and Small Business Banking adjusted net income increased 2% from the prior year to $659 million.
CIBC announced a hike in its quarterly dividend to $1.44 per share. This represents a tasty 5.6% yield. Even after its post-earnings bump, it offers solid value with a P/E ratio of nine and a P/B of 1.3.
Scotiabank
Scotiabank (TSX: BNS)(NYSE: BNS) stock has climbed 6.1% in 2019 so far. The “International Bank” released its third-quarter 2019 results on August 27. Its Latin American holdings proved to provide a nice boost in the quarter.
On an adjusted basis, Scotiabank reported net income of $2.46 billion, or $1.88 per diluted share, which was up from $2.26 billion, or $1.76 per diluted share, in Q3 2018. Scotiabank’s international banking division provided double-digit earnings growth in the quarter, fuelling its first earnings beat in over a year. Headwinds on the domestic front are frustrating investors, which is why Scotia’s exposure to Pacific Alliance countries is encouraging.
Better yet, Scotiabank announced a dividend increase to $0.90 per share, which is paid out quarterly. This represents a strong 5.1% yield. The bank has achieved dividend growth for eight consecutive years.
