Canada’s bank stocks are often revered for their ability to generate stable revenue from domestic markets, build an international stream of revenue, and pay out handsome dividends. But what’s the best Canadian bank stock for investors this year?
Let’s try to determine which Canadian bank stock stands out for investors in 2026.
Pick #1: Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD) is the second-largest of the big banks. In addition to its strong domestic segment at home, TD benefits from an even larger international segment that’s focused on the U.S. market.
That U.S. segment is the primary driver for TD’s growth. TD’s branch network stretches along the East Coast from Maine to Florida, generating an increasing share of the bank’s revenue.
Despite that international growth, TD’s domestic arm shouldn’t be ignored. In the most recent quarterly update, the Canadian personal and commercial banking segment hit record revenue, fueled by strong loan growth and deposits.
The bank’s strong revenue helps to reinforce TD’s strong CET1 ratio, meaning it can weather any bumps in the market. It also means the bank can continue to pay out its superb quarterly dividend.
As of the time of writing, TD pays out a yield of 3.3%.
For prospective investors contemplating whether TD is the best Canadian bank stock to own, TD is an appealing pick. Specifically, TD appeals to investors seeking a long‑term holding with a solid, growing dividend and meaningful U.S.-anchored growth.
Pick #2: Bank of Nova Scotia
Investors contemplating the best Canadian bank stock for 2026 should also take a look at Bank of Nova Scotia (TSX:BNS). Scotiabank isn’t the largest of the big banks.
Instead, Scotiabank is known as Canada’s most international bank. That large international presence is where the bank turns for growth. In recent years, Scotiabank has shifted its international focus away from developing markets in Latin America to more mature North American markets.
That comes with more stable revenue streams and considerably lower risk. That de-risking has started to bolster Scotiabank’s earnings. In short, the bank’s overall profitability is improving.
Scotiabank is also investing more in those mature markets. A recent example is Scotiabank’s purchase of a 14.9% minority stake in KeyCorp, giving the bank strategic exposure to a mature U.S. market without the risks of a full acquisition.
Turning to income, Scotiabank offers investors a well-covered quarterly dividend. The bank has paid that dividend without fail for nearly two centuries. Today, the payout ratio is below 75%, making it a well-covered option for income-seeking investors.
As of the time of writing, Scotiabank offers a yield of 4.3% and boasts over a decade of consecutive annual increases.
Investors who see Scotiabank as the best Canadian bank stock are those focused on the higher-yield and long-term value based on its growth-market refocusing efforts. The tradeoff for investors is that a higher yield comes with more volatility at the moment.
Pick #3: Royal Bank of Canada
The third option for investors looking to crown the best Canadian bank stock of 2026 is Royal Bank of Canada (TSX:RY). Royal is the largest of the big banks and is often regarded as the benchmark for the other big banks.
But does its size and status make it the best Canadian bank stock right now?
Royal benefits from its diversified business units, which include retail banking, wealth management, capital markets, and insurance. These help to smooth out earnings, especially if one segment lags behind in a quarter.
That’s where the sweet spot is for Royal. It’s a stable, gentle giant that keeps moving, keeps growing at a slower pace than its peers. It doesn’t deliver the same growth profile as TD or the international upside of Scotiabank. And that’s perfectly fine for some investors.
Turning to dividends, Royal offers investors a quarterly dividend that carries a yield of 2.9%. Not as high as its peers, but it’s well-covered and lower risk.
That’s exactly the audience that Royal appeals to – specifically, investors who seek a growing dividend, stable results, and low volatility.
What’s the best Canadian bank stock?
There’s no single best Canadian bank stock for every investor. Instead, each of the big banks mentioned above plays a different role to each investor.
Those who seek strong growth and U.S. exposure may prefer what TD offers.
Investors looking for income and value will lean toward Scotiabank.
Finally, those seeking a mix of all with more stability will prefer Royal.
In any event, one or all of these could represent the best Canadian bank stock for 2026.
