Canada’s top banks passed through the final batch of earnings for the 2021 fiscal year. It was a very strong year for the country’s biggest financial institutions after a challenging period in 2020. The S&P/TSX Capped Financial Index has climbed 32% in the year-to-date period as of close on December 30. Today, I want to look at three top bank stocks that I’d look to hang onto in 2022.
This regional bank stock often flies under the radar
The Big Six Canadian banks typically soak up all the headlines and attention during earnings season. However, investors should not overlook regional bank stocks like Canadian Western Bank (TSX: CWB). This Edmonton-based bank services clients primarily in Western Canada, but it has expanded eastward. Shares of this bank stock have climbed 27% in 2021.
Canadian Western released its fourth-quarter and full-year 2021 earnings on December 3. In Q4 2021, total revenue rose 10% year over year to $261 million. Meanwhile, pre-tax and pre-provision income increased 6% to $123 million. For the full year, income jumped 10% to $517 million. Moreover, loans and branch-raised deposits climbed 9% and 16%, respectively, from the previous full year.
This bank stock possesses an attractive price-to-earnings (P/E) ratio of 9.7. It last declared a quarterly dividend of $0.30 per common share. That represents a 3.3% yield.
Canada’s “International Bank” offers nice value and income
Scotiabank (TSX: BNS)(NYSE: BNS) is sometimes referred to as “The International Bank” due to its significant global presence. It boasts nice exposure to the fast-growing Latin American markets. Shares of this bank stock have climbed 34% in 2021 as of close on December 30. The stock has shot up 14% month over month.
In Q4 2021, Scotiabank delivered adjusted net income of $2.71 billion or $2.10 per share — up from $1.93 billion, or $1.45 per share, in the previous year. For the full year, adjusted diluted earnings per share increased 46% year over year to $7.87. Scotiabank benefited from strong volume growth and a big dip in provisions set aside for credit losses. International banking earnings rose 62% from the prior year to $1.85 billion.
Shares of this bank stock last had a solid P/E ratio of 11. Scotiabank hiked its quarterly dividend to $1.00 per share, representing a 4.3% yield.
One more bank stock that is worth owning in 2022
Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM) is the third bank stock I’d look to snatch up in the new year. CIBC is the fifth largest of the Big Six Canadian bank stocks. Its shares have increased 36% in the year-to-date period.
The bank released its final batch of 2021 results on December 2. Adjusted net income climbed 23% year over year to $1.57 billion in the fourth quarter. CIBC delivered big growth in all segments. Canadian personal and business banking delivered adjusted profit growth of 40% from 2020 to $2.50 billion. Better yet, U.S. commercial banking and wealth management adjusted net income jumped 124% to $976 million.
This bank stock last had a favourable P/E ratio of 10. It recently increased its quarterly dividend payout to $1.61 per share, representing a solid 4.3% yield.
