Canadian banks are some of the best investments out there. Many have been around for over 100 years, providing stable income and savings that show investors they aren’t disappearing any time soon. However, when it comes to value and growth, most Canadian banks have already been there, done that. So today, we’re going to look at one Canadian bank that’s making major moves. Moves that could send shares higher, while still offering that stability.
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Enter National Bank
If you’re looking for a Canadian bank stock that looks like a winner, National Bank (TSX: NA) could be that stock. The bank stock recently reported earnings growth that investors might have missed, especially as these were masked by generally accepted accounting principle (GAAP) noise. The bank stock reported earnings per share (EPS) down 11% year-over-year, which came down to acquisition-related items. So it didn’t look like it was off to a good start.
Here’s the thing: adjusted net income grew by 15% and adjusted earnings per share (EPS) remained flat. This was truer to its earnings power, and revenue reflected that. Total revenue reached $3.5 billion, up 15%, with provisions for credit losses at $203 million, up from $149 million the year before. As for those GAAP efficiencies, the ratio worsened to 55.8% from 51.4%, causing investors to worry. Yet again, it’s important to remember the company’s major acquisition.
Buying CWB
So let’s discuss that acquisition, shall we? National Bank closed its Canadian Western Bank acquisition in February 2025, and it’s already flowing into results. Loans increased 20%, with deposits up 21% year-to-date. Furthermore, synergies are starting to show as well, with revenue up 21% year-over-year in personal and commercial banking, and 13% in wealth. As integration costs slow, efficiency should improve even further.
Now, National Bank has scaled up from a regional Quebec bank to a national player. That’s particularly true in Western Canada. And management sees the potential, with the plan to purchase up to eight million shares. It also increased the dividend by 7%, showing confidence as well.
Value and income
Now investors can take this opportunity to get in on growth, value, and income. In fact, the bank stock trades at just 12.9 times earnings, cheaper than most global bank peers. Furthermore, its gain of about 18% in the last year shows there’s room for more upside, especially if synergies and earnings flow through as expected.
As for income, the current dividend yield of 3.2% is a bit lower, but the recent increase could mean more are on the way. Add in buybacks, and investors get a balance of cash income today and capital appreciation tomorrow. In fact, investing $7,000 today could bring in $217 in dividends immediately each year!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| NA | $150.43 | 46 | $4.72 | $217 | Quarterly | $6,919 |
Bottom line
Investors will want to look at the bank stock’s ongoing synergies when considering the stock to see if that execution meets any roadblocks. Yet overall, it’s a strong stock getting stronger. It offers double-digit adjusted earnings growth, a rising dividend, and a major acquisition as a catalyst for the future. Plus, a share buyback! So if you’re an investor looking for a bank stock to add to your portfolio for long-term income, this could be the one to beat on the TSX today.
