The Big Six Canadian banks had a strong start to 2022. Indeed, Canadian banks cleared the hurdle that was the COVID-19 pandemic and delivered impressive results considering the challenges in the previous year. However, rising interest rates and consumers under pressure from surging inflation has taken its toll in 2022.
Today, I want to look at my three favourite bank stocks to target after the final set of bank earnings were released in late November and early December. Let’s dive in.
This bank stock offers a huge discount before the new year
Bank of Montreal (TSX: BMO) is the third largest of the Big Six Canadian bank stocks by market cap. This Toronto-based bank offers nice exposure to the United States market. Meanwhile, it remains a powerhouse as a domestic bank.
Shares of this top bank stock have climbed 13% in 2022 a of close on December 23. The stock has dropped 5.6% over the past month. If you want a more detailed picture of its recent performance, you can play with the interactive chart below.
The bank unveiled its fourth-quarter (Q4) and full-year fiscal 2022 earnings on December 1. In Q4 2022, BMO posted adjusted net income of $2.13 billion compared to $2.22 billion in the previous year. Meanwhile, adjusted net income for the full year rose to $9.03 billion — up from $8.65 billion for the full year in 2021.
This bank stock possesses a very favourable price-to-earnings (P/E) ratio of 6.1. Better yet, it offers a quarterly dividend of $1.43 per share. That represents a solid 4.6% yield.
Canada’s international bank should be on your radar right now
Scotiabank (TSX: BNS) is sometimes called “The International Bank” in Canada, as it offers significant exposure to global markets. It boasts a very strong presence in Latin America, an economic space that has delivered strong growth over the past decade. This is the fourth largest of the Big Six Canadian banks by market cap.
This bank stock has plunged 26% in 2022. Its shares have slipped 7.1% month over month as of close on December 23. Scotiabank posted its final batch of fiscal 2022 results on November 29. Adjusted net income was reported at $10.7 billion, or $8.50 per diluted share, for the full year in 2022 — up from $10.1 billion, or $7.87 per diluted share, in the previous year.
Scotiabank stock last had an attractive P/E ratio of 8.2. Moreover, this bank stock offers a quarterly dividend of $1.03 per share, representing a tasty 6.2% yield.
One more cheap bank stock to snatch up today
Canadian Imperial Bank of Commerce (TSX: CM) is the third top bank stock I’d look to snatch up after earnings in late December. This is the fifth largest of the Big Six bank stocks. However, investors should not let its size determine whether it is worth buying compared to its larger peers. Shares of CIBC have declined 26% in the year-to-date period.
In Q4 2022, CIBC delivered revenue growth of 6% to $5.38 billion. Meanwhile, adjusted net income plunged 17% to $2.07 billion or $1.39 per diluted share. Shares of this bank stock possess a very favourable P/E ratio of 8.1. It offers a quarterly dividend of $0.85 per share, which represents a very strong 6.2% yield.
