1 Canadian Dividend Stock for New Investors to Buy Now

National Bank of Canada’s (TSX:NA) super-regional model and a focused international strategy has demonstrated the bank’s resilience.

| More on:
Where to Invest?

Image source: Getty Images

Through the second half of fiscal 2020, the National Bank of Canada (TSX:NA) performed exceedingly well and assets under administration and management returned to pre-crisis levels. National Bank’s financial markets segment delivered strong results in 2020. The bank’s global markets franchise was well-positioned going into the crisis and delivered particularly strong growth.

An established leader in selected niche markets

Further, National Bank’s corporate and investment banking franchise also performed well, driven by solid momentum in mergers and acquisitions (M&A) and government debt underwriting. As an established leader in selected niche markets, National Bank’s financial markets business appears to be an important pillar, providing the bank with a diversified earnings stream.

Looking forward, National Bank looks all set to continue to place client support front and centre while maintaining a prudent risk profile. The bank’s performance and positioning of international activities have been excellent. Subsidiaries of National Bank, Credigy in the United States, and ABA Bank in Cambodia have consistently delivered superior returns.

In 2020, ABA Bank grew at a faster pace than the market and surpassed the one million client threshold. Looking forward, both Credigy and ABA Bank continue to have strong momentum and are well-positioned to deliver attractive earnings growth.

Highest standards in corporate governance

In addition, National Bank is putting the full strength of the organization behind the bank’s environmental, social, and governance guiding principles, with the aim to develop a green economy, enrich the bank’s communities, and uphold the highest standards in corporate governance.

A year to the day after signing the United Nations (UN) Principles for Responsible Banking, National Bank announced an ambitious target to reduce the bank’s own greenhouse gas emissions by 25% by 2025, compared to 2019 levels.

Furthermore, National Bank becomes a signatory of the UN Women’s Empowerment Principles in 2020, further strengthening the bank’s commitment to women’s equality. The bank also committed to the Black North Initiative as well as to partnering with the Government of Canada to launch the country’s first-ever Black entrepreneurship program. These are but a few initiatives National Bank is taking to build a better future for all of the company’s stakeholders.

Transparency regarding the bank’s progress

Also, National Bank’s objective appears to be for the bank to further promote diversity and inclusion to ensure that it reflects the diversity of the bank’s clients and society. National Bank has set measurable targets and appears to be transparent regarding the bank’s progress.

Looking back at fiscal 2020, National Bank demonstrated a proven ability to adapt to evolving circumstances. Although the bank remained in the grip of the pandemic at year-end, economic activity has recovered from the lows and National Bank expects gradual improvement in 2021 in the context of continued public health measures and the use of a vaccine.

In this environment, National Bank’s overall strategic positioning appears to be the right strategy.

Resilience and super-regional model

Further, National Bank’s super-regional model with a leading franchise in Quebec, a pan-Canadian footprint in selected activities, and a focused international strategy has demonstrated the bank’s resilience. This should serve shareholders well.

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.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Nikhil Kumar has no position in any of the stocks mentioned. 

More on Investing

tsx today
Stock Market

TSX Today: Why Record-Breaking Rally Could Extend on Thursday, March 28

The main TSX index closed above the 22,000 level for the first time yesterday and remains on track to post…

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Arrowings ascending on a chalkboard
Energy Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Canadian Natural Resources stock is well set up to beat the TSX as it continues to generate strong cash flows…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »