The Canadian stock market turmoil doesn’t seem to be ending soon, as equities continue to remain volatile, despite indications of easing inflationary pressures. As a result, in the second quarter of 2023, the TSX Composite benchmark has erased most of the gains it saw in the first quarter to currently hover well below the key 20,000 level.
In such turbulent markets, adding some reliable Canadian bank stocks to your portfolio could be a good idea. Besides their attractive dividends, some TSX-listed banks also have the potential to deliver handsome capital gains in the long run. Let’s take a closer look at two of the best Canadian bank stocks I find worth buying in June 2023.
National Bank of Canada stock
National Bank of Canada (TSX:NA) is the first stock on the Toronto Stock Exchange you may want to consider buying in June, as its continued financial strength could help it outperform the broader market despite the broader market challenges. This Montréal-headquartered bank currently has a market cap of $32.8 billion, as its stock trades at $97.03 per share with about 6.4% year-to-date gains.
Interestingly, National Bank’s dividend rose nearly 26% YoY (year over year) to $3.58 per share in 2022. With this, it offers a decent 4.2% annualized dividend yield at the current market price.
Despite a challenging environment, National Bank has shown resilience and stability lately. In the second quarter of its fiscal year 2023 (ended in April), it reported an adjusted net income of $847 million. Although this income figure was down 5% YoY, it still indicates a strong financial position, as the bank continued to post positive revenue growth across its business segments.
Moreover, Bay Street analysts expect National Bank’s earnings growth to turn positive in the second half of its fiscal year 2023, as its diverse portfolio continues to perform well, which could help its stock advance further.
Laurentian Bank of Canada stock
Laurentian Bank of Canada (TSX:LB) is another stable Canadian bank stock I find worth considering in June 2023. Despite starting 2023 on a mixed note by losing 1.5% of its value in the March quarter, its share prices have seen appreciation in recent months. Currently, LB stock has a market cap of $1.4 billion, as it trades at $33.06 per share with about 3.9% quarter-to-date gains. This bank stock offers an impressive 5.7% annualized dividend yield at this market price.
In the April 2023 quarter, Laurentian Bank’s revenue fell less than 1% YoY to $257.2 million but managed to exceed analysts’ expectations. Similarly, its adjusted quarterly net profit of $51.7 million stood higher than the Street’s estimate of $48.9 million. While a recent increase in its provision for credit losses due mainly to the ongoing economic uncertainties disappointed investors, its net interest income rose nearly 2% YoY last quarter to $184.2 million.
Despite ongoing temporary challenges, Laurentian Bank’s long-term financial growth outlook remains firm with its consistent focus on loan and deposit growth, efficiency improvements, and digital transformation. These factors can help the share prices of this top Canadian bank stock outperform the market in the long run.
