1 Dividend Stock Down 4% Canadians Can Buy and Hold for Decades

A great dividend stock doesn’t need to be on sale forever. Sometimes it only needs to pull back enough to make patient investors pay attention.

That looks like the case with National Bank (TSX:NA). The dividend stock recently sat about 4% below its 52-week high, after a strong run that still left new buyers with a better entry point than they had only weeks ago. So, is it worth it?

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National Bank rarely gets the same national attention as its bigger peers. That can make it more interesting. It’s Canada’s sixth-largest bank stock, with deep strength in Quebec, a growing national wealth-management business, and capital markets operations that can shine when deal activity improves. It also now owns Canadian Western Bank, giving it a stronger presence in Western Canada and more room to grow outside its home market.

Canadian banks face a mixed economy, cautious borrowers, and pressure from credit losses. Yet National Bank keeps showing why it deserves a premium reputation. In its second quarter of 2026, the bank reported net income of $1.23 billion, up 38% from last year. Diluted earnings per share (EPS) also rose 41% to $3.06.

The dividend also looks appealing for long-term investors. National Bank raised its quarterly dividend by $0.08 to $1.32 per share. That gives shareholders $5.28 per share annually, yielding about 2.6% at recent prices. Some investors may shrug at that, but they shouldn’t. A lower yield from a fast-growing bank can beat a high yield from a weaker company over decades.

Growth and income

The payout also looks reasonable, at a 46% ratio. That gives management room to invest, absorb credit noise, and still reward shareholders. Yet the timely catalyst comes from scale. The Canadian Western Bank deal gives National Bank a bigger commercial footprint and a stronger Western Canadian platform. If management integrates it well, the bank could grow earnings faster than investors expect. A friendlier rate environment could also help loan demand and market activity recover over time.

Still, investors need to respect the risks. Bank stocks feel economic stress quickly. If unemployment rises, housing weakens, or businesses pull back, loan losses can climb. National Bank also now needs to prove it can integrate Canadian Western Bank without stumbling. A strong quarter does not erase those risks.

Valuation deserves a balanced view, too. National Bank doesn’t look dirt cheap after its big climb over the last year, with shares trading at 18.3 times earnings. Investors buying today should not expect an instant rebound simply because the stock dipped from its high. That’s the useful part of a pullback. Buying slowly can help reduce timing risk while leaving room to add if another market wobble arrives.

Bottom line

That’s why this stock fits a buy-and-hold mindset. National Bank combines earnings growth, dividend growth, acquisition upside, and a powerful Canadian banking franchise. It won’t avoid every downturn, but it has the kind of discipline and profitability that can help patient investors compound wealth through market cycles. And even now, a $7,000 investment can bring in strong income for any investor.

So, is a 4% pullback enough? For Canadians who want a dividend stock they can tuck away for decades, National Bank looks worth buying in stages today.