The Big Six Canadian banks experienced a significant increase in prestige following the 2007-2008 financial crisis and the Great Recession. Canada’s banks have historically pursued a conservative approach to lending, which largely protected the population from the worst effects of the financial crisis that threatened global economic stability in the late 2000s and early 2010s. These banks have also delivered strong dividend-growth streaks. That should pique investor interest in the early summer of 2023.
Today, I want to zero in on three Canadian bank stocks that also qualify as top-tier Dividend Aristocrats. Let’s jump in.
The smallest of the Big Six bank stocks has one of the longest dividend-growth streaks
National Bank (TSX:NA) is the sixth largest of the Big Six Canadian bank stocks. However, this Montreal-based bank is still a powerhouse in its home province of Quebec. Shares of this bank stock have dropped 3.4% month over month as of close on Tuesday, June 27. The stock is still up 5.8% so far in 2023. Investors who want to see more can play with the interactive price chart below.
This bank released its second-quarter (Q2) fiscal 2023 earnings on May 31. National Bank reported adjusted net income of $847 million, or $2.38 per diluted share — down from $889 million, or $2.53 per diluted share, in the previous year. Meanwhile, adjusted net income in the first half of fiscal 2023 fell 4% to $1.75 billion, or $4.94 per diluted share.
National Bank has delivered 13 consecutive years of dividend growth. It currently offers a quarterly distribution of $1.02 per share. That represents a solid 4.2% yield. Shares of National Bank also possess a favourable price-to-earnings (P/E) ratio of 10 at the time of this writing.
Why TD Bank is worth snatching up for its income growth right now
TD Bank (TSX:TD) is the second-largest Canadian bank by market capitalization, trailing only behind the behemoth that is Royal Bank of Canada. Shares of this bank stock have increased 1.1% month over month as of close on June 27. The stock is still down 8.6% in the year-to-date period.
In Q2 2023, TD Bank reported adjusted net income of $3.75 billion, or $1.94 per diluted share — down from $3.71 billion, or $2.02 per diluted share, in the previous year. Meanwhile, adjusted net income rose to $7.90 billion, or $4.17 per diluted share, in the first half of fiscal 2023, which was up from $7.54 billion, or $4.09 per diluted share. TD Bank posted net income growth in its Canadian and United States Personal and Commercial Banking in Q2.
This bank has posted 12 straight years of dividend growth. TD Bank last paid out a quarterly dividend of $0.96 per share, which represents a 4.8% yield.
One more bank stock I’d snatch up with a great dividend-growth streak
Scotiabank (TSX:BNS) is the third bank stock I’d target for its impressive history of income growth. This bank stock has dropped 4% over the past month. That has pushed Scotiabank’s shares into negative territory in the year-to-date period. This bank stock currently possesses an attractive P/E ratio of 9.5.
The bank has also delivered dividend- growth for 12 consecutive years. Scotiabank currently offers a quarterly dividend of $1.06 per share, representing a very tasty 6.5% yield.
