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Canadian bank stocks are starting to see a recovery as interest rates stabilize and the economy shows signs of resilience. This shift is helping banks recover from recent pressure, so it's a good time to review these stocks, especially those like Canadian Imperial Bank of Commerce (TSX:CM) and Bank of Montreal (TSX:BMO). Both deserve attention due to strong dividend yields and strong market positions, especially as they continue to expand trading offerings. With this recovery, these two banks could offer the right mix of growth and income for savvy investors.
CIBC
If you're looking for a stock that's making waves, CIBC may deserve a spot on your radar. The bank recently announced its plan to buy back up to 20 million common shares, or about 2.1% of its outstanding shares, as part of a normal issuer offering. This measure not only shows confidence in your financial health. It also aims to enhance shareholder value through effective capital management.
Additionally, CIBC's third-quarter financial results were impressive. It reported a 13% increase in revenue year over year, reaching $6.6 billion. And a whopping 25% increase in reported net income. Adjusted net income increased 28% and adjusted diluted earnings per share (EPS) increased 27% compared to the same quarter last year. With a strong common equity tier one (CET1) ratio of 13.3%, it shows strong financial stability.
Combine all that with a generous dividend yield and a proactive approach to growth, and you have a compelling case to seriously consider CIBC stock. Its commitment to returning value to shareholders, coupled with strong financial performance, makes it a leading player in the banking sector. So if you're thinking about diversifying your portfolio, it might be worth taking a closer look at CIBC!
BMO
BMO stock is also a stock to watch, especially after its strong third-quarter 2024 results. The bank reported net income of $1.865 billion, a significant improvement compared to the same period last year. Adjusted net income was $1,981 million and earnings per share rose to $2.64 on an adjusted basis. These results highlight BMO's ability to manage its operations efficiently despite a cyclical increase in credit losses. This caused provisions for credit losses to increase to $906 million.
One of the key reasons to consider BMO stock is its strong capital position. With a CET1 ratio of 13%, BMO maintains a solid balance sheet. This provides the bank with the flexibility to continue generating value for shareholders through dividends and potential growth initiatives. In fact, BMO has declared a fourth-quarter dividend of $1.55 per common share, which is a 5% increase over last year!
BMO's diversified businesses, including strong performance in Canadian personal and commercial banking and a strong segment in the U.S., are driving steady profit growth. With an impressive track record of sustainable profitability and recognition of its corporate responsibility, BMO offers stability and long-term growth potential for investors. So, if you're looking to add reliable bank stocks to your portfolio, BMO is definitely worth a closer look!
silly takeaway
When comparing CIBC and BMO on the TSX today, both offer great value, but BMO might have a slight advantage. BMO's third quarter results show solid profit growth and a higher CET1 ratio, indicating strong financial stability, while its dividend yield of around 5% is competitive. However, CIBC also has a strong dividend, but BMO's diversified operations and focus on growth in the Canadian and US markets give it a favorable outlook. For those looking for a combination of value, reliable dividends, and growth potential, BMO could be the best buy right now.