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 consider buying right now.

Key Points
  • Now looks like a favourable entry point into Canada’s big banks, which offer reliable dividends, defensive businesses, and long-term growth as markets adjust to interest rates.
  • TD provides U.S.-driven growth plus domestic stability, supporting a ~3.38% dividend yield and a decade-plus streak of annual raises.
  • BMO combines a nearly 200-year dividend record with a 32-state U.S. footprint, delivering diversification and a ~3.73% yield with consistent increases.

Are you invested in Canada’s big bank stocks? If not, now may be one of the best entry points in years. The big banks offer investors a powerful combination of reliable dividends, defensive business segments, and long-term growth potential. And with markets still adjusting to interest rate changes and shifting market conditions, it has never been a better time to buy the big bank stocks.

Here’s a look at two great options for investors who are looking to buy the big bank stocks right now.

coins jump into piggy bank

Source: Getty Images

Option 1: Toronto-Dominion Bank

Toronto-Dominion Bank (TSX: TD) is the second-largest of the big banks. It’s also one of the big bank stocks that should be on every investor’s shopping list. TD offers investors a rare mix of growth, defensive stability, and consistent income generation.

TD’s primary growth market is the U.S. market. In the years following the Great Recession, TD acquired and integrated several regional banks, building its current network that stretches from Maine to Florida.

The U.S. exposure gives TD access to a massive market with higher population growth and more economic drivers than the Canadian market alone.

That being said, TD’s domestic segment is not to be understated. In the most recent quarter, the segment posted net income of $200 billion, reflecting a 2% bump over the same period last year.

That stability helps support TD’s quarterly dividend, as well as further growth-focused investments.

As of the time of writing, that quarterly payout boasts a yield of 3.4%. TD also has an established history of providing annual upticks going back over a decade.

This makes TD one of the solid big bank stocks to own for growth, income, and defensive appeal.

Option 2: Bank of Montreal

The other one of the big bank stocks to buy right now is Bank of Montreal (TSX: BMO). BMO is the oldest of the big banks and has been paying out dividends for nearly two centuries without fail.

That’s an incredible amount of time that few companies can match. It also furthers the defensive case for investors looking to buy big bank stocks.

As of the time of writing, BMO offers investors an appetizing quarterly dividend with a yield of 3.7%. Like TD, BMO has also provided investors with an annual uptick to that dividend going back over a decade.

But what makes investors want to buy BMO as one of the big bank stocks for any portfolio is its growth strategy. Over the past decade, BMO has aggressively targeted growth in the U.S. market.

Those efforts have paid off. BMO now boasts a footprint in 32 state markets, making it one of the largest banks in the U.S., with a presence focused on the Midwest and California, where it serves millions of customers with billions in deposits.

The U.S scale gives BMO a diversified revenue base and exposure to faster-growing markets, while continuing to serve a strong domestic segment at home.

Buy the big bank stocks today, earn income tomorrow

Both TD and BMO offer investors a great mix of international growth, domestic stability and rising quarterly dividends. It’s also worth noting that the big banks enjoy a massive defensive moat.

In short, they are strong options to consider for any well-diversified portfolio.

Buy them, hold them, and watch them (and your future income) grow.

Fool contributor Demetris Afxentiou has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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