2 Canadian Bank Stocks to Buy for Growth and Stability

Invest in these two Big Six Canadian bank stocks if you seek growth and stability for your self-directed investment portfolio.

| More on:
Thrilled women riding roller coaster at amusement park, enjoying fun outdoor activity.

Group of friends laughing on a roller coaster ride at the amusement park during sunny day.

Key Points

  • Canadian banks like Toronto-Dominion (TSX:TD) and Scotiabank (TSX:BNS) are driving the TSX's 2025 gains, offering strong dividends and long-term growth.
  • With dividend yields of 3.86% (TD) and 4.91% (BNS), both stocks are solid picks for income-focused investors, though better entry points may come in a downturn.
  • 5 stocks our experts like better than [Toronto-Dominion] >

Canadian banks and the broader economy have had a pretty good year of performance on the stock market so far in 2025. Despite the looming threat of stock market volatility, the economy seems to be booming. As of this writing, the S&P/TSX Composite Index, which is the benchmark for the Canadian stock market, is up by 19.6% year-to-date.

Canada’s Big Six Banks are some of the top drivers of the growth for the Canadian markets during this bull market rally. Here is a look at two of the big bank stocks that you should consider adding to your investment portfolio to leverage the uptick to your advantage.

Toronto-Dominion Bank

Toronto-Dominion Bank (TSX:TD) is a $185 billion market-cap Canadian bank. Canadian bank stocks are considered some of the best investments to own because of stable earnings, growing revenue, and significant long-term growth potential. The fact that they offer regular distributions through quarterly dividends makes them even more attractive. TD is the second-largest of the Big Six, and it boasts a massive presence in the domestic and US banking sectors.

TD Bank has been paying investors dividends for almost two centuries without interruptions. This means it has paid investors through global health crises, wars, and several worldwide economic downturns. Its exposure to the American market provides an alternative to Canada’s stable operations while providing it the ability to deliver substantial growth in the long run.

As of this writing, TD Bank stock trades for $108.39 per share and boasts a 3.9% dividend yield that you can lock into your self-directed portfolio.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) is another one of the Big Six, boasting a $111.3 billion market capitalization. Like its other peers, it has an extensive track record for reliably paying shareholders their dividends. Scotiabank stock has paid uninterrupted dividends since 1833. The bank has significant domestic operations and an extensive presence in several international markets, including the US, Latin America, Asia-Pacific, and Europe.

Scotiabank has more recently shifted its focus away from Latin America to prioritize growth in the more stable and lower-risk North American market. The bank is also undergoing a share buyback program, which could see it re-purchase up to 20 million shares between May 30, 2025 and May 29, 2026.

As of this writing, Scotiabank stock trades for $89.60 per share, and it boasts a 4.9% dividend yield that you can lock into your self-directed investment portfolio today.

Foolish takeaway

Investors interested in generating a passive income through dividends and with a long investment horizon can consider investing in the bank stocks at current levels. However, those seeking significant capital gains in the near term might want to consider practicing a bit of patience. The stock market is cyclical, and when the next downturn comes along, it might bring share prices down to more attractive levels and inflate dividend yields.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Bank of Nova Scotia. The Motley Fool has a disclosure policy.

More on Bank Stocks

Lights glow in a cityscape at night.
Stocks for Beginners

Is Royal Bank of Canada a Buy for Its 2.9% Dividend Yield?

Royal Bank is the “default” dividend pick, but National Bank may offer more income and upside if you’re willing to…

Read more »

coins jump into piggy bank
Stocks for Beginners

Canadian Bank Stocks: Which Ones Look Worth Buying (and Which Don’t)

Not all Canadian bank stocks are buys today. Here’s how RY, BMO, and CM stack up on safety, upside, and…

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Bank Stocks

Is BNS Stock a Buy, Sell, or Hold for 2026?

Following its big rally this year, should you put Bank of Nova Scotia stock in you TFSA or RRSP?

Read more »

chatting concept
Bank Stocks

3 Reasons to Buy TD Bank Stock Like There’s No Tomorrow

TD Bank stock has surged over the last year to trade at an all-time high, but here’s a closer look…

Read more »

A plant grows from coins.
Bank Stocks

1 Canadian Stock to Rule Them All in 2026

This top Canadian stock is combining powerful momentum with long-term conviction, and it could be the clear market leader in…

Read more »

investor looks at volatility chart
Bank Stocks

Volatility? Bank Stocks Are the Place to Be

Canada's bank stocks are great long-term investments for any portfolio. Here's a duo for every investor to consider today.

Read more »

dividends grow over time
Bank Stocks

2 Canadian Dividend Stocks That Are Smart Buys for Capital Growth

Not all dividend stocks are slow movers, and these two Canadian giants show why growth can still be part of…

Read more »

coins jump into piggy bank
Bank Stocks

Now is the Time to Buy the Big Bank Stocks

It’s always a good time to buy the big bank stocks. Here are two great picks for any investor to…

Read more »