Value stocks are all Motley Fool investors want these days. Value stocks are what experts like Warren Buffett look for. Their fundamentals and future growth far outweigh the trading value at current levels. They’re usually blue-chip companies that offer dividends, too. So, there really is no reason not to buy them.
Yet the Canadian Big Six banks remain in value territory, offering Motley Fool investors a chance to buy low and sell incredibly high in the years to come. Whether you’re just starting out or looking to retire, these are the three best bank stocks out there for value seekers.
CIBC
First, I’d consider Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM). CIBC is one of the best bank stocks for those seeking dividends. It has the highest of the Big Six banks, offering $6.44 per share per year. And yet it still trades at a valuable 10.23 times earnings!
Analysts continue to raise the target price for CIBC stock again and again. It currently sits at about $175 per share as a target but trades at $147. That’s a potential upside of 19%! And over the years the company has seen stellar growth. Its shares have a compound annual growth rate (CAGR) of 7.1% over the last decade, up 98% during that time.
So, with CIBC, you get the highest dividend, stable growth, and even more growth in the future — all for a incredibly valuable price among bank stocks.
TD
Next up, I’d consider Toronto-Dominion Bank (TSX: TD)(NYSE: TD) for Motley Fool investors wanting growth. TD stock has upped its game over the last few years. It’s become one of the top six banks in the United States and continues to grow its online presence. Further, it has a variety of loan options for its customers, bringing in cash even during the volatile economic situation we’ve had these last few years.
But more growth continues. TD stock has made partnerships with credit card companies and is growing its wealth and asset management sector. Yet the increase of prime rates has sent shares back below $100 per share. It now trades at a valuable 11.97 times earnings.
Yet again, TD stock is one of the bank stocks offering a strong chance to get in during the dip. If it returned to 52-week highs, that’s a potential upside of 13%. Further, you can lock in a dividend yield of 3.77%. Finally, shares are up 128% over the last decade! That’s a CAGR of 16.6%!
BMO
Finally, Bank of Montreal (TSX: BMO)(NYSE: BMO) offers significant value for those seeking both sides of the dividend and growth coin. Shares of BMO stock have trended upwards at a strong pace over the past few years, even during the market downturn. But that growth could jump in the coming years.
There is a significant acquisition for the company compared to other bank stocks. BMO is looking for management to hear of regulatory approval for a BNP Paribas acquisition in the United States. This would see the company increase at an astounding rate across the border thanks to the US$16.3 billion acquisition.
Meanwhile, you can still lock in a 3.72% dividend yield and shares trading at 11.31 times earnings. This may be the best opportunity out there, as the company continues to see shares rise for now, and they could be higher after the acquisition.
