The Motley Fool

Blue-Chip Stocks: 2 Top TSX Banks

Image source: Getty Images

When it comes to reliable long-term returns, it’s often hard to top the performance of TSX blue-chip stocks. Typically, these are steady stocks that pay attractive and growing dividends, which pay investors handsomely over time.

Canada’s banking sector is home to many of the top TSX blue-chip stocks. Generally, banking tends to be one of the leading sectors for our economy.

While the major Canadian banks usually all offer investors a solid investment proposition, they do differ in how they do so. Each bank might therefore appeal to a different type of investor.

Today, we’ll look at two top Canadian bank stocks that can deliver great results for investors over the long run.

BMO

Bank of Montreal (TSX:BMO)(NYSE:BMO) is a massive Canadian bank with a growing stake in the U.S. market as well. It’s long been a favourite amongst investors looking for blue-chip stocks.

In fact, when it comes to just looking at dividends, it’s hard to argue against BMO. This banking giant has made a dividend payment every single year since 1829 – the longest streak for TSX stocks.

Not to mention, for most of that time BMO has been focused on growing its dividend to continue delivering value to investors. As of this writing, BMO is trading at $109.99 and yielding 3.85%.

BMO’s dividend stability and growth stems from its wide moat of revenue sources. BMO also has a healthy balance sheet with plenty of cushion.

Plus, with its U.S. presence it has more geographical diversification than some of its banking peers. All in all, BMO seems to be in a solid position to continue delivering attractive returns for its investors.

With a yield of nearly 4%, investors can enjoy dividend income from BMO, or re-invest the dividends to fully capture the power of compounding. Either way, it’s certainly a blue-chip stock to keep an eye on.

TD Bank

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is another top Canadian bank ideal for long-term investors. As of this writing, it has a market cap over two times that of BMO.

If U.S. exposure is your thing, TD could arguably be an even better pick than BMO. Along with being a top five bank in Canada, it’s also already a top 10 bank in the U.S. as well.

Like with BMO, investors of TD can enjoy geographical diversification. This helps mitigate some of the risks banks face in terms of Canadian exposure.

TD typically exhibits industry-leading growth and consistently ranks as a top bank in Canada. Investors also enjoy a dividend that clocks in at 3.87% as of this writing.

TD’s track record for growth and expansion, and future plans to continue doing so, make it an attractive blue-chip stock for the long haul. Whenever investors can scoop up a near-4% yield with a name like TD, it’s typically a solid proposition.

Blue-chip stock strategy

Both BMO and TD offer investors great long-term return potential, especially compared to most other TSX stocks. These banking giants have the financial ability to not only sustain but grow their current holdings and dividends.

If you’re looking for some top quality TSX stocks, make sure to not ignore these names.

But that's not all..

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

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 Jared Seguin has no position in any of the stocks mentioned.

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.