Bank Stocks: 2 TSX Superstars to Buy

Looking to pick up shares of some high-quality TSX bank stocks? Find out what makes these two options unique and attractive for long-term investing.

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Bank stocks have long been premier choices for investors focused on long-term gains. These TSX blue-chip stars typically offer not only reliable growth, but also stable dividends.

Of course, it’s easy to lump the major bank stocks in Canada together. After all, their prices generally move in lockstep and it’s one of Canada’s biggest sectors.

However, each bank offers unique benefits when it comes to investing. As such, it’s important for investors to figure out their needs before selecting bank stocks to buy.

Today, we’ll look at two of the top TSX bank stocks that investors might consider for their portfolios.


Royal Bank of Canada (TSX:RY)(NYSE:RY) is a massive stock with the largest market cap among Canadian banks. This TSX behemoth has long been a favourite among investors seeking reliable share price growth as well as a rock-solid dividend.

RY is able to offer these things to investors because of the structure of its business. It has a diverse range of products and services and hence a wide moat of revenue sources.

The stability of RY’s dividend speaks for itself, as the bank stock has paid a dividend every year since 1870. Plus, it has not only paid but also increased the dividend for much of that time as well.

There isn’t really much of a shroud of mystery surrounding RY. This is just a blue-chip superstar with ample financial cushion and an ironclad business structure.

As of this writing, RY is trading at $140.25 and yielding 3.42%. That might not be an absolutely huge yield, but there is room for it to increase going forward. At any rate, investors can count on a solid investment when it comes to RY.


Bank of Montreal (TSX:BMO)(NYSE:BMO) is another major Canadian bank stock that offers investors a great avenue for total returns over time.

When it comes to dividends, BMO is the cream of the crop. It’s paid a dividend every year since 1829 and is still going strong.

Like with RY, that type of stability is due to how BMO’s business is structured. It has great financial power and a solid mix of revenue sources to help it offer investors unmatched reliability.

When compared to some of its peers, BMO has focused much more of its efforts on growth in the U.S. to add to its strong positioning in Canada. This expansion choice gives BMO the possibility for plenty of growth going forward.

As of this writing, BMO is trading at $144.90 and yielding 3.67%. Similar to RY, that dividend has room to be increased as well.

Investors looking for a bank stock with aggressive growth opportunities and a rock-solid dividend should check out BMO.

Bank stock strategy

Both RY and BMO are great bank stocks ideal for long-term investing. These TSX superstars offer investors respectable growth as well as sustainable dividends.

Over time, the total returns from these bank stocks could be quite attractive. Choosing either name could be the way to go, and simply depends on which of their approaches you prefer.

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

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