The 3 Best-Performing Canadian Bank Stocks of 2019

Up 28% year-to-date, National Bank of Canada (TSX:NA) was 2019’s best-performing bank stock

| More on:
edit Four girl friends withdrawing money from credit card at ATM

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Bank stocks are among the most the most reliable long-term investments on the TSX. Due to Canada’s highly regulated financial services industry, they enjoy a level of stability that most foreign banks can’t match. Canadian banks are known for conservative lending practices and sound financial management.

As a result, they don’t grow as quickly as U.S. banks, but they’re very safe, having endured not a single banking crisis in the past 150 years.

That said, Canadian banks are not all the same. Differing in terms of their international presence and domestic operations, they produce varying results.

This year, a few TSX bank stocks stood out as winners while others were clear losers. The following are the best three performing banks of the year.

The Toronto Dominion Bank (TSX:TD)(NYSE:TD): up 8.8%

TD Bank has been Canada’s fastest-growing bank over the past few years. Thanks to its large and growing U.S. retail business, it has outclassed most of its peers on earnings growth.

More recently, that earnings growth trend has begun to slow. For the recently ended fiscal year, TD grew earnings at only 3%, whereas in past years it had been approaching double digit growth.

The earnings slowdown was largely due to challenges in the U.S., where TD Ameritrade came under fire from no-fee trading. Regardless, TD was still the third-best performing big bank of the year, posting a solid 8.8% return.

Bank of Montreal (TSX:BMO)(NYSE:BMO): up 13.3%

The Bank of Montreal is one of Canada’s oldest and most dependable banks. Having not missed a single dividend payment since 1829, it’s been a paragon of stability.

BMO’s operations fall into a few different categories, which can be arranged by geography.

In Canada, the bank offers the full range of typical financial services: retail, commercial, insurance and wealth management.

In the U.S., BMO has a retail bank, a commercial bank, and an investment advisory business.

Providing solid and stable returns to investors, BMO has risen 13.3% this year.

National Bank of Canada (TSX:NA): up 28%

National Bank of Canada is the smallest of the Big Six banks. With its operations concentrated mainly in Quebec, it’s not quite as ubiquitous as the rest of its peers.

Nevertheless, it’s a well-regarded financial institution, having ranked third in Bloomberg’s 2011 “Most Respected Financial Institutions” list.

In its most recent quarter, National Bank grew its earnings by 7%, making it the strongest grower among the Big Six for that period. The bank also hiked its dividend by a modest but significant 4%. The quarter was very well received, as the bank bucked the trend of Canadian banks under-performing in late 2019.

As a result of National Bank’s comparatively strong performance, its stock has risen 28% this year. That’s by far the best performance among the Big Six banks, which mostly under-performed.

NA shares also pay a dividend that yields about 4%, so shareholders got an income boost on top of their considerable gains.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button owns shares of TORONTO-DOMINION BANK.

More on Investing

Target. Stand out from the crowd
Energy Stocks

3 Oversold TSX Stocks I’d Buy in Bulk

Recession fears impact oil prices, although three oversold stocks should remain resilient and generate substantial free funds flow throughout 2022.

Read more »

Stocks for Beginners

New Investors: 3 Top Dividend Stocks to Start a Simple Portfolio

These quality dividend stocks are worthy for new investors to consider for a simple passive-income portfolio.

Read more »

Dollar symbol and Canadian flag on keyboard
Tech Stocks

3 Top Canadian Growth Stocks to Buy in July

Here are three growth stocks you might want to add to your buy list in July.

Read more »

edit Four girl friends withdrawing money from credit card at ATM
Bank Stocks

CIBC Stock Could Be a Top TFSA Buy for a Rocky 2nd Half of 2022

CIBC (TSX:CM)(NYSE:CM) stock is a great dividend top pick to stash in a TFSA after the first-half market correction.

Read more »

exchange-traded funds
Dividend Stocks

2 Dividend ETFs With Significant Exposure to the TSX’s Top 2 Sectors

Two dividend ETFs offer ideal diversification because of their exposure to the TSX’s two strongest sectors.

Read more »

sale discount best price
Investing

RRSP Investors: Top Stock Pick on Sale After the Stock Market Correction

Quebecor (TSX:QBR.B) looks like a terrific dividend stock for RRSP investors to buy, as recession risks rise amid a market…

Read more »

edit Colleagues chat over ketchup chips
Investing

The Alternative Way to Look at Any Recession

Market down? Instead of losses, look for potential gains. This alternative way to look at any recession exposes a market…

Read more »

Arrow descending on a graph
Energy Stocks

Why Did Oil Stocks Crash so Suddenly?

Oil stocks like Cenovus Energy (TSX:CVE)(NYSE:CVE) crashed dramatically last week. Here's why.

Read more »