3 Bank Stocks That Pay Big Dividends

Stocks like Laurentian Bank of Canada (TSX:LB) and Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) offer tasty dividends for investors.

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Stacking stocks that offer income is one path to peace of mind in a volatile market. Canadian bank stocks are popular because of their balance of growth and income and consistent profit, but today I want to look at three bank stocks that stand out for their hefty dividend payouts. All three are worth consideration as we move into September.

Laurentian Bank

Laurentian Bank (TSX:LB) is a regional bank based in Quebec. Shares have climbed 19.3% in 2019 as of close on August 29. Laurentian has managed to thrive in the face of a publicized short call from Steve Eisman.

In the third quarter, Laurentian saw profit fall to $47.8 million compared to $54.9 million in the prior year. For the first nine months of 2019, net income has dropped 24% to $131.4 million, and diluted earnings to share have fallen 27% to $2.88. Laurentian struggled due to lower year-over-year loan volumes as well as lower lending and deposit fees.

Still, Laurentian stock possesses a favourable price-to-earnings (P/E) ratio of 10.4 and a price-to-book (P/B) of 0.8. It last paid out a quarterly dividend of $0.66 per share, which represents an attractive 5.9% yield. The bank has achieved dividend growth for 11 consecutive years.

Canadian Imperial Bank of Commerce

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) stock shot up by the most it had in over a year in response to its third-quarter earnings report. I’d discussed why CIBC looked dirt cheap ahead of its earnings report last week. Shares have climbed 3.9% in 2019 so far.

In the third quarter, CIBC got a big boost from its U.S. Commercial Banking and Wealth Management segment. Adjusted net income in the segment rose 6% year over year to $182 million. This was due mostly to higher revenue. Canadian Personal and Small Business Banking adjusted net income increased 2% from the prior year to $659 million.

CIBC announced a hike in its quarterly dividend to $1.44 per share. This represents a tasty 5.6% yield. Even after its post-earnings bump, it offers solid value with a P/E ratio of nine and a P/B of 1.3.

Scotiabank

Scotiabank (TSX:BNS)(NYSE:BNS) stock has climbed 6.1% in 2019 so far. The “International Bank” released its third-quarter 2019 results on August 27. Its Latin American holdings proved to provide a nice boost in the quarter.

On an adjusted basis, Scotiabank reported net income of $2.46 billion, or $1.88 per diluted share, which was up from $2.26 billion, or $1.76 per diluted share, in Q3 2018. Scotiabank’s international banking division provided double-digit earnings growth in the quarter, fuelling its first earnings beat in over a year. Headwinds on the domestic front are frustrating investors, which is why Scotia’s exposure to Pacific Alliance countries is encouraging.

Better yet, Scotiabank announced a dividend increase to $0.90 per share, which is paid out quarterly. This represents a strong 5.1% yield. The bank has achieved dividend growth for eight consecutive years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. Scotiabank is a recommendation of Stock Advisor Canada.

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