The Big Six Canadian banks unveiled their final batch of results for the 2021 fiscal year in late November and early December. Canada’s top financial institutions put together a strong year after a challenging 2020. However, investor anxiety has ramped up as the Bank of Canada (BoC) has shifted its attention to rate hikes in 2022. Today, I want to look at the three best bank stocks to pick up before the New Year. Let’s jump in.
Here’s why I’m still excited about TD Bank after a strong 2021
TD Bank (TSX: TD)(NYSE: TD) is the second-largest Canadian bank by market cap. It boasts the largest United States footprint compared to its peers. Shares of TD Bank have climbed 32% in 2021 as of close on December 10. The stock has dipped marginally in the week-over-week period. I’d suggested that TD Bank was worth snatching up in early November.
The bank unveiled its fourth-quarter and full-year 2021 earnings on December 2. In Q4 2021, adjusted net income rose to $3.86 billion or $2.09 per share — up from $2.97 billion, or $1.60 per share, in the previous year. Meanwhile, adjusted earnings for the full year increased to $14.6 billion, or $7.91 per share. TD Bank delivered strong growth in its major segments. Moreover, its U.S. Retail segment saw its Wholesale Bank deliver record earnings.
Shares of this bank stock possess a favourable price-to-earnings (P/E) ratio of 12. The bank announced a quarterly dividend hike to $0.89 per share. That represents a 3.7% yield.
This bank stock offers nice income after its Q4 earnings report
Bank of Montreal (TSX: BMO)(NYSE: BMO) was my top bank stock pick after its Q4 2021 earnings release. I’m still on board with this Quebec-based bank stock as we approach the midway point of December. This bank stock has shot up 44% in the year-to-date period. Its shares have dipped 1% month over month.
In Q4 2021, BMO reported adjusted net income growth of 38% to $2.22 billion or $3.33 on a per-share basis. Like its peers, BMO benefited from a big drop in provisions set aside for credit losses. For the full year, adjusted net income climbed 66% year over year to $8.65 billion, or 68% on an adjusted per-share basis to $12.96.
This bank stock last had an attractive P/E ratio of 11. Better yet, it offers a quarterly dividend of $1.33 per share. This represents a 3.8% yield.
One more bank stock to scoop up in December
Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM) is the third bank stock I’d suggested investors snatch up in the middle of December. It is the fifth largest of the Big Six banks. CIBC stock has increased 31% in 2021. The stock has retreated 4.9% month over month.
CIBC released its fourth-quarter and full-year 2021 earnings on December 2. It delivered adjusted net income growth of 23% from Q4 2020 to $1.57 billion or 21% on a per-share basis to $3.37. The bank achieved growth in all business segments and looks very strong looking ahead to 2022.
Shares of this bank stock possess a very favourable P/E ratio of 10. Moreover, it last hiked its quarterly dividend to $1.61 per share. That represents a solid 4.5% yield.
