The S&P/TSX Capped Financials Index rose a fraction of a point on Tuesday, September 12. Financials are the largest sector on the TSX Index, but the space has incurred a loss in the year-over-year period at the time of this writing. As usual, Canada’s Big Six banks have led the way. Unfortunately, all but one is in the black in 2023. BMO Equal Weight Banks ETF (TSX: ZEB) offers investors exposure to Canada’s bank stocks. Shares of this exchange-traded fund (ETF) have dropped 3.7% in 2023 as of close on Tuesday, September 12. The only bank stock that has delivered positive returns so far in 2023 is National Bank (TSX: NA).
Today, I want to discuss whether this bank stock is worth snatching up as we look to close the book on the summer of 2023.
How has this bank stock outperformed its peers in 2023?
National Bank is a Montreal-based financial institution that offers various financial products and services to retail, commercial, corporate, and institutional clients in Canada and around the world. This bank is the smallest of the Big Six Canadian bank stocks by total market capitalization. However, it remains a powerhouse in its home province of Quebec.
Shares of National Bank have plunged 8.6% month over month as of close on Tuesday, September 12. However, this bank stock is still up 2.8% in the year-to-date period. Its shares have climbed 2.5% year over year. Investors can see more of its recent and past performances with the interactive price chart below.
Should investors be pleased with National Bank’s recent earnings?
This bank released its third-quarter (Q3) fiscal 2023 earnings on August 30. National Bank reported adjusted net income of $790 million or $2.21 per share — up 2% compared to net income of $826 million or $2.35 per share in Q3 2022. In the first nine months of fiscal 2023, National Bank reported adjusted net income of $2.54 billion, or $7.15 per diluted share — down 4% and 5%, respectively, compared to the previous year.
National Bank’s Personal and Commercial Banking segment reported net income of $328 million — up from $319 million in Q3 2022. This segment was powered by improved revenue growth while higher non-interest expenses and higher provisions set aside for credit losses served as headwinds. Meanwhile, the Wealth Management segment posted net income growth of 5% to $183 million. However, National Bank’s Financial Markets segment reported net income of $205 million — down 27% compared to the prior year. This segment was dragged by a sharp decline in global market revenues.
National Bank: Is this bank stock worth buying in the middle of September?
Shares of National Bank currently possess a favourable price-to-earnings ratio of 10. The bank stock is trading in attractive value territory compared to its competitors at the time of this writing. Moreover, National Bank last paid out a quarterly dividend of $1.02 per share. That represents a solid 4.3% yield. This bank stock is still on my radar, as it offers nice value and has delivered rare consistency in a shaky market.
