Member Login
  1. Category
    2. /
  2. Investing
    3. /
  3. Bank Stocks
    4. /

Bank Stocks

What are bank stocks?

Bank stocks represent partial ownership in a financial institution that’s licensed to hold and loan money. Over time, bank stocks have been relatively safe investments, as they offer products and services that most people need.

How do you choose a good bank stock? 

1. Look at the bank’s profitability

First, you want to be sure the bank is even profitable. To do that, you can use the following metrics. 

  • Return on equity (ROE): this metric tells you how much profit a bank makes from its shareholder’s equity. The higher this metric, the more efficient a bank is using its stakeholder’s money. 
  • Return on assets (ROA): the ROA tells you the overall profit a bank makes in relation to its assets. The higher the ROA, the more profit a bank makes from its assets. 
  • Efficiency ratio: the efficiency ratio tells you how much revenue a bank uses towards its operating costs. The lower the efficiency ratio, the more revenue a bank theoretically has. 

2. Assess the bank’s risks 

One of the biggest risks a bank has is losing money on an outstanding loan. As with profitability, a couple metrics could help you see how much banks are losing.

  • Nonperforming loans ratio (NPL): Nonperforming loans are loans that are at least 90 days past their due date. A bank with a low percentage of NPL (2% is a good ratio) is doing fairly well collecting loan repayments from its customers. 
  • Net charge-offs: a net charge-off is a bank’s declaration stating that a loan hasn’t been paid and is unlikely to be paid. As with NPLs, the less net charge-offs a bank has, the less money it’s losing on outstanding loans. 

3.  Check back here for our top picks 

Finally, we’ll keep this page updated with our staff writer’s reviews and assessment of Canada’s bank stocks. Our writers often use these metrics to help investors see which bank stocks are doing well and which are doing poorly. 

Check back here for the most up to date information about bank stocks in Canada.

Top Articles

Bank Stocks

Is BNS Stock a Buy in January 2023?

| Andrew Walker

Bank of Nova Scotia stocks looks cheap right now. Is this a good time to buy or should investors wait?

Read more »

Bank Stocks

TSFA or RRSP – Better Place to Stash Cash in 2023?

| Amy Legate-Wolfe

If a recession hits us hard in 2023, you'll want the ability to take out cash if you need it.…

Read more »

Dividend Stocks

TFSA Investors: Why You Should Invest Your Room ASAP With These 3 Stocks

| Adam Othman

Choosing the right TFSA stocks for your portfolio might take some time. But with the right choices, you can stick…

Read more »

Bank Stocks

Is Now the Right Time to Buy Canadian Bank Stocks?

| Andrew Button

Some bank stocks, like Toronto-Dominion Bank (TSX:TD) are doing well; others, not so much. Is it time to buy bank…

Read more »

Bank Stocks

2 Bank Stocks to Load Up on in a Recession

| Chris MacDonald

Here are two top Canadian bank stocks investors may want to consider, particularly as we potentially head into a recession.

Read more »

Bank Stocks

Better Buy: RBC Stock or the Entire TSX?

| Brian Paradza, CFA

Buying Royal Bank of Canada (TSX:RY) stock lets you invest like Warren Buffett does, but investing in the entire TSX…

Read more »

Bank Stocks

CRA: 3 Big Changes Coming to 2023 Tax Breaks

| Aditya Raghunath

Use the tax breaks to lower your tax bill and purchase blue-chip TSX stocks such as Royal Bank of Canada.

Read more »

Bank Stocks

The 1 TSX Stock I’d Go All-In On

| Andrew Button

TD Bank (TSX:TD)(NYSE:TD) stock is out of favour now but could come back in a big way.

Read more »

Recent Bank Stocks News

Bank Stocks

What’s Next For TD Bank Stock After Earnings?

| Karen Thomas, MSc, CFA

TD Bank stock is already down big from its 2022 highs. Rising interest rates and the risk of recession may…

Read more »

Bank Stocks

How TFSA and RRSP Investors Can Turn $3,000 Into $20,000 in 7 Years

| Amy Legate-Wolfe

There is immense value in Canadian banks today, so you can certainly use this dip as an opportunity to create…

Read more »

Dividend Stocks

Better Buy for Passive Income: Suncor Energy or TD Stock?

| Vineet Kulkarni

When it comes to investing for passive income, stability matters more.

Read more »

Man data analyze
Bank Stocks

Better Buy Amid SVB Failure: TD Bank Stock or BMO Stock?

| Joey Frenette

Check out TD Bank (TSX:TD) and another battered Canadian bank stock, while SVB fears weigh on the TSX Index.

Read more »

tsx today
Bank Stocks

TSX Today: What to Watch for in Stocks on Tuesday, March 14

| Jitendra Parashar

The U.S. inflation data and ongoing turmoil in the banking sector could keep TSX stocks highly volatile today.

Read more »

Bank Stocks

Better Buy: TD Stock or Bank of Nova Scotia?

| Chris MacDonald

The question of whether Toronto-Dominion Bank (TSX:TD) stock or Bank of Nova Scotia (TSX:BNS) stock is a better buy is…

Read more »

Bank Stocks

Is Now the Right Time to Buy Bank of Montreal Stock?

| Demetris Afxentiou

Canada’s big banks are some of the best long-term options on the market, but is it really the right time…

Read more »

Bank Stocks

Silicon Valley Bank Collapse: Why Scotiabank Stock Investors Shouldn’t Worry About it

| Jitendra Parashar

Here are key reasons why Scotiabank investors shouldn’t worry about concerns emerging from Silicon Valley Bank’s recent collapse.

Read more »

money cash dividends
Tech Stocks

Sitting on Cash? These 2 TSX Stocks Are Great Buys Today But Won’t Be Forever

| Sneha Nahata

Put your idle cash to work. Earn solid capital gains with these cheap TSX stocks.

Read more »

Bank Stocks

Will Canadian Western Bank Be the Next Silicon Valley Bank?

| Kay Ng

Like Silicon Valley Bank, Canadian Western Bank is a regional bank. Should CWB investors worry about the business's viability?

Read more »

tsx today
Bank Stocks

TSX Today: What to Watch for in Stocks on Monday, March 13

| Jitendra Parashar

New developments related to the Silicon Valley Bank may keep the TSX stocks, especially bank stocks, volatile.

Read more »

Bank Stocks

Why I Invest in Canadian Banks But Not U.S. Banks

| Kay Ng

Long-term investors should benefit from buying the dip in the big Canadian bank stocks and getting nice dividend income.

Read more »

clock time
Bank Stocks

Is Now the Right Time to Buy TD Stock?

| Chris MacDonald

Here's why long-term investors may want to consider Toronto-Dominion Bank (TSX:TD) stock in this tumultuous economic period.

Read more »

Bank Stocks

TFSA Investors: Don’t Give Up! How Even $100/Month Can Grow Into a $100,000 Portfolio

| Amy Legate-Wolfe

Don't give up on your goals, even if you don't have much to put aside! Any investor putting $100 away…

Read more »

Tech Stocks

2 Canadian Stocks Prepped to Have a Big Year

| Andrew Button

Shopify is one TSX stock that could have a good year this year. There's another one, too!

Read more »

Energy Stocks

Got $1,500? You Can Confidently Add These 3 Stocks to Your Portfolio

| Andrew Button

If you have some money to invest, you can invest it confidently in Royal Bank of Canada stock.

Read more »

Bank Stocks

Better Buy: BMO Stock or CIBC Stock?

| Demetris Afxentiou

Canada's big banks are some of the best investments on the market. Here's a look at two big banks titans…

Read more »

Bank Stocks

Where to Invest Your Tax Refund in 2023

| Amy Legate-Wolfe

Don't let tax season get you down. Use your tax refund to your advantage to create more income and never…

Read more »

A worker drinks out of a mug in an office.
Bank Stocks

My Take: The Only 3 TSX Stocks You Need in 2023

| Amy Legate-Wolfe

If you're looking for a recovery after a recession, these are the only three TSX stocks I'd consider for 2023.

Read more »

Bank Stocks

Is BMO Stock a Buy After Earnings?

| Vineet Kulkarni

BMO stock has lost 11% in the last 12 months, while the TSX Financial Index has dropped 9%.

Read more »

A worker gives a business presentation.
Bank Stocks

With Interest Rates Rising, 3 Bank Stocks Poised to Profit

| Andrew Button

Banks like the Toronto Dominion Bank and Bank of America are among my favourites.

Read more »

Bank Stocks

How to Invest $10,000 to Create Reliable Passive Income

| Kay Ng

Although Bank of Nova Scotia stock can continue to be pressured in the near term, you can start with a…

Read more »

tsx today
Bank Stocks

TSX Today: What to Watch for in Stocks on Wednesday, March 1

| Jitendra Parashar

Strengthening metals prices could help the TSX index open slightly higher today.

Read more »

Bank Stocks

Should You Buy Royal Bank of Canada Stock in This Uncertain Market?

| Daniel Da Costa

RBC is a stable long-term stock to buy, but is it at risk in the short term if the economy…

Read more »

Bank Stocks

Canadian Imperial Bank of Commerce: Should You Buy CIBC Stock After its Earnings?

| Daniel Da Costa

CIBC stock may be trading roughly 25% off its 52-week high and offering a dividend yield of 5.5%, but is…

Read more »

Dividend Stocks

Trend Spotter: 3 Sectors That Could Make a 180-Degree Turn This Year

| Christopher Liew, CFA

Three sectors could make a 180-degree turn this year and deliver superior returns in 2023. Here is one likely rebound…

Read more »

Bank Stocks

3 Canadian Bank Stocks for Tax-Free TFSA Income

| Andrew Button

The Bank of Montreal is a Canadian bank stock that may be worth investing in.

Read more »

Bank Stocks

Could TD Stock Pick Up the Pace in 2023?

| Chris MacDonald

Here's why I think Toronto-Dominion Bank (TSX:TD) stock could be an intriguing investment to own for 2023 and beyond.

Read more »

A worker uses a laptop inside a restaurant.
Bank Stocks

$10,000 Invested in Canadian Western Bank Stock Can Help You Earn $450 in Annual Dividend Income

| Aditya Raghunath

Canadian Western Bank is trading at an attractive valuation and offers investors a tasty dividend yield of 4.5%. Is CWB…

Read more »

Bank Stocks

How to Pay Off Debt in 2023

| Amy Legate-Wolfe

Whether you need to take drastic measures, or feel in control of your finances, you can certainly pay down debt…

Read more »

Bank Stocks

The 3 Canadian Bank Stocks Worthy of Your TFSA

| Joey Frenette

TD Bank (TSX:TD) and two other Big Six Canadian bank stocks look like great value options for TFSA investors in…

Read more »

think thought consider
Bank Stocks

RBC Stock: Should You Invest in February 2023?

| Aditya Raghunath

Royal Bank of Canada has delivered stellar returns to investors in the last 20 years. But is RBC stock a…

Read more »

Bank Stocks

I Keep Buying Shares of This Dividend Stock Hand Over Fist

| Andrew Button

I have been buying shares of Toronto-Dominion Bank (TSX:TD) hand over fist for years.

Read more »

calculate and analyze stock
Bank Stocks

BNS Stock: A Smart Investment Today?

| Jitendra Parashar

BNS stock has risen 11% in 2023 so far. But is it worth buying today? Let’s find out.

Read more »

Bank Stocks

Why RBC Stock Is the Most Valuable Stock on the TSX Today

| Kay Ng

Any investor can have peace of mind their growing wealth long term by owning Royal Bank of Canada (TSX:RY) shares…

Read more »

Bank Stocks

Is goeasy the Best Growth Stock to Buy in February 2023?

| Vineet Kulkarni

goeasy stock has lost 15% in the last 12 months but has returned over 250% in the last five years.…

Read more »

Bank Stocks

BMO Stock: Is it a Good Investment Today?

| Demetris Afxentiou

Have you considered BMO for your portfolio? Here’s why this big bank may be a good investment for today, tomorrow,…

Read more »

Bank Stocks

TD Stock: Is it a Good Investment Today?

| Andrew Walker

TD stock is up more than 6% in 2023. Are more gains on the way?

Read more »

Bank Stocks

Here’s the Next TSX Stock I’m Going to Buy

| Nicholas Dobroruka

With no shortage of uncertainty in the stock market right now, I’m looking to load up on this dependable TSX…

Read more »

Bank Stocks

Will Bank of Nova Scotia’s Stock Price Soar in 2023?

| Andrew Walker

Bank of Nova Scotia is up more than 12% to start 2023. Are more gains on the way?

Read more »

Frequently Asked Questions

Why invest in bank stocks?

Quality bank stocks have a strong history of generating profits and managing crises, making them a great investment.

In addition to their strong performance, many of Canada’s top banks pay dividends, with payouts that increase over time. For Canadian investors looking to pocket a little extra from their stocks, dividends can help you buy more shares or more cash.

Finally, bank stocks can help diversify your investing portfolio. If you already have stocks in other sectors (mining, technology, energy), bank stocks could add much needed stability, as well as expose you to the gains in another sector.