The Big Six Banks are some of the strongest stocks on the TSX today. Not only that, these are some of the largest by market cap. And not just in Canada, but even compared to their peers in the United States.
When comparing the largest of the batch Royal Bank of Canada (TSX: RY) with a market cap of $201.7 billion, even American banks are seen as smaller. For instance, Citigroup (NYSE: C) is at just US$121 billion!
But today we’re not talking about Royal Bank stock. We’re talking about the other heavy hitters – ones that are already on the recovery, with a lot more to come.
CIBC
While not the biggest of the Big Six, Canadian Imperial Bank of Commerce (TSX: CM) still holds the third highest spot. The bank sits at a market cap of $63.2 billion and currently holds a dividend yield at 5.3%.
Shares of the bank stock slumped in the last year among higher interest rates and inflation. These tend to push the stock down given its large exposure to the Canadian market. Higher rates can mean lower loan payments. And there was fear the company would take some time to recover.
However, during its latest earnings report CIBC stock reported earnings that soared past estimates. And now, earnings for the second quarter are due! So hopefully, investors are seeing an improved position that’s leading to even more growth for this Canadian dividend stock.
So with shares still trading at a valuable 10.3 times earnings in the last year, and up 18%, there is certainly still more room to run. Especially as shares come closer and closer to 52-week and even all-time highs.
BMO stock
Another bank stock that’s due for a break out is Bank of Montreal (TSX: BMO). BMO stock has become the bank stock when it comes to exchange-traded funds (ETF), offering everything under the sun. However, it’s also expanding rapidly as well, especially in the United States.
BMO stock managed to purchase Bank of the West right before the U.S. closed its borders to large foreign institutions acquiring businesses. So now, the company has gained exposure to the U.S. and holds an advantage over its peers.
Meanwhile, shares of BMO stock currently offer a dividend yield at 4.9%, with shares trading at 17.6 times earnings. While this makes it near fair value, BMO stock continues to offer value. After all, shares are up 7% in the last year, with more growth due in earnings.
The company’s second quarter is due out and should see shares rise hopefully if BMO stock is able to offer more growth in its U.S. branches. And if you want stability, BMO stock is the one for you. It may not be the largest bank at a $93.3 billion market cap, but it is the oldest. The bank has been around since 1817 and doesn’t look to be slowing down any time soon.
Bottom line
While these are the biggest of the Big Six Banks, they offer the best chance for a recovery, especially as earnings come out with second-quarter results. So grab these stocks as they continue to recover, offering higher dividends as well as long-term growth.
