Canadian markets have suffered from a spell of volatility due to several factors. Chief among them is the threat of rising interest rates. The Bank of Canada recently announced the end of its QE bond-buying program. This indicates a tightening cycle that will challenge the broader economy and the ongoing bull market. Today, I want to look at three bank stocks that still look like a solid buy today. Let’s jump in.
Here’s why TD is still my top bank stock pick today
TD Bank (TSX: TD)(NYSE: TD) is the second-largest financial institution in Canada. It also boasts the largest United States retail banking footprint among the Big Six. Shares of this top bank stock have climbed 24% in 2021 as of close on October 28. The stock has shot up 52% from the prior year. I’d suggested that investors scoop up TD Bank in April as the economy was on the rebound.
The bank unveiled its third-quarter 2021 results on August 26. In Q3 2021, TD Bank posted an adjusted net income of $3.62 billion or $1.96 on a diluted per share basis. Meanwhile, adjusted net income in the first nine months of 2021 rose to $10.7 billion or $5.83 per share – up from $6.99 billion or $3.76 per diluted share in the year-to-date period in 2020.
Shares of this bank stock possess a favourable price-to-earnings ratio of 10, putting it in better territory than its top peers. Moreover, it offers a quarterly dividend of $0.79 per share. That represents a 3.5% yield.
Don’t sleep on Canada’s top global bank this fall
Scotiabank (TSX: BNS)(NYSE: BNS) is another top Canadian bank stock with significant global reach. In this case, Scotiabank boasts a strong presence in Latin America. Shares of this bank stock have increased 21% in the year-to-date period. The stock is up 49% year over year.
On August 24, Scotiabank released its third-quarter 2021 results. Adjusted net income rose to $2.56 billion or $2.01 on a per-share basis compared to $1.30 billion or $1.04 on a per-share basis in the previous year. The Canadian banking retail segment delivered growth of 150% from the prior year to $1.08 billion. Meanwhile, its international banking segment rose to $493 million over $53 million in Q3 2020.
This bank stock last had a favourable P/E ratio of 11. It last paid out a quarterly dividend of $0.90 per share, which represents a solid 4.3% yield.
One more bank stock to snatch up right now
Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM) is the fifth-largest of the Big Six bank stocks. Last month, I’d discussed why CIBC looked like it was on sale amid a bout of volatility. Shares of CIBC have climbed 5.7% month-over-month as of close on October 28. The stock has climbed 39% in the year-to-date period.
CIBC’s profit jumped 48% from the prior year to $1.73 billion. Like its peers, it was bolstered by a significant drop in provisions set aside for credit losses. Its core banking unit delivered profit growth of 40% to $642 million. Moreover, it returned to form on the housing front. Its mortgage book rose to $240 billion – up from $230 billion in the previous quarter.
Shares of this bank stock have a solid P/E ratio of 11. It offers a quarterly dividend of $1.46 per share. That represents a 3.8% yield.
