Big 6 Canadian Bank Stocks
| Stock | Ticker | Dividend Yield | P/E Ratio | Market Cap | 10-Yr Div Growth |
|---|---|---|---|---|---|
| Royal Bank | RY | ~3.8% | ~12x | $230B+ | ~7%/yr |
| TD Bank | TD | ~4.8% | ~11x | $150B+ | ~8%/yr |
| BMO | BMO | ~4.5% | ~11x | $90B+ | ~5%/yr |
| Bank of Nova Scotia | BNS | ~6.0% | ~10x | $75B+ | ~4%/yr |
| CIBC | CM | ~4.8% | ~10x | $70B+ | ~5%/yr |
| National Bank | NA | ~3.5% | ~12x | $45B+ | ~9%/yr |
Individual Bank Profiles
Royal Bank of Canada (RY)
| Metric | Value |
|---|---|
| Dividend yield | ~3.8% |
| Payout ratio | ~45% |
| P/E ratio | ~12x |
| Revenue | $55B+ |
| Strengths | Largest bank, wealth management leader, capital markets |
| Risks | Premium valuation, US expansion costs |
| Verdict | Best overall — quality at a fair price |
TD Bank (TD)
| Metric | Value |
|---|---|
| Dividend yield | ~4.8% |
| Payout ratio | ~55% |
| P/E ratio | ~11x |
| Revenue | $50B+ |
| Strengths | Largest branch network (Canada + US), retail banking |
| Risks | US regulatory issues, AML concerns |
| Verdict | Value play if you believe regulatory issues are priced in |
BMO Financial Group (BMO)
| Metric | Value |
|---|---|
| Dividend yield | ~4.5% |
| Payout ratio | ~50% |
| P/E ratio | ~11x |
| Revenue | $32B+ |
| Strengths | Bank of the West acquisition, US presence, BMO ETFs |
| Risks | Integration costs, credit losses |
| Verdict | Solid mid-tier with growing US business |
Bank of Nova Scotia (BNS)
| Metric | Value |
|---|---|
| Dividend yield | ~6.0% |
| Payout ratio | ~65% |
| P/E ratio | ~10x |
| Revenue | $32B+ |
| Strengths | International presence (Latin America), highest yield |
| Risks | Emerging market exposure, slower growth |
| Verdict | Best yield — but growth is the weakest |
CIBC (CM)
| Metric | Value |
|---|---|
| Dividend yield | ~4.8% |
| Payout ratio | ~55% |
| P/E ratio | ~10x |
| Revenue | $24B+ |
| Strengths | Canadian mortgage leader, US private banking |
| Risks | Concentrated in Canadian housing market |
| Verdict | Undervalued with housing market exposure (positive or negative) |
National Bank (NA)
| Metric | Value |
|---|---|
| Dividend yield | ~3.5% |
| Payout ratio | ~40% |
| P/E ratio | ~12x |
| Revenue | $12B+ |
| Strengths | Fastest growth, Quebec dominance, wealth management |
| Risks | Smaller size, Quebec concentration |
| Verdict | Growth pick — lowest yield but highest capital appreciation potential |
10-Year Total Return (Approximate)
| Bank | $10K Invested 10 Years Ago | Avg Annual Return |
|---|---|---|
| NA | ~$32,000 | ~12.5% |
| RY | ~$28,000 | ~10.8% |
| BMO | ~$24,000 | ~9.2% |
| TD | ~$20,000 | ~7.2% |
| CM | ~$22,000 | ~8.2% |
| BNS | ~$16,000 | ~4.8% |
Includes dividends reinvested. Past performance does not guarantee future results.
How to Pick
By Goal
| Goal | Best Bank | Why |
|---|---|---|
| Quality and safety | RY | Strongest balance sheet, best ROE |
| Highest income | BNS | 6% yield |
| Growth + income | NA | Fastest growing, lowest payout ratio |
| Value play | TD, CM | Trading below historical averages |
| US exposure | BMO, TD | Significant US operations |
Dividend Income on $50,000
| Bank | Yield | Annual Dividends | Quarterly Payment |
|---|---|---|---|
| BNS | 6.0% | $3,000 | $750 |
| TD | 4.8% | $2,400 | $600 |
| CM | 4.8% | $2,400 | $600 |
| BMO | 4.5% | $2,250 | $563 |
| RY | 3.8% | $1,900 | $475 |
| NA | 3.5% | $1,750 | $438 |
Canadian Bank Stocks vs Bank ETFs
| Feature | Individual Stocks | ZEB (Big 6 ETF) | VDY (Dividend ETF) |
|---|---|---|---|
| Diversification | 1 stock | 6 banks equally | 50+ stocks |
| MER | $0 | 0.28% | 0.22% |
| Rebalancing | Manual | Automatic (equal-weight) | Automatic |
| Concentration | 100% 1 company | 100% banks | ~55% banks |
| Customization | Full control | None | None |
| Best for | Conviction picks | Pure bank exposure | Broad dividend |
Which Account to Hold Bank Stocks
| Account | Tax Treatment | Notes |
|---|---|---|
| TFSA | Dividends tax-free | ✅ Best for Canadian bank stocks |
| RRSP | Tax-deferred | ✅ Good, especially if near retirement |
| Non-registered | Eligible dividend tax credit | ✅ Dividends taxed favourably |
Canadian bank dividends receive the eligible dividend tax credit in non-registered accounts, making them one of the most tax-efficient equity investments.
Risks
| Risk | Explanation |
|---|---|
| Housing correction | All banks have mortgage exposure |
| Recession | Loan losses increase, slowing earnings |
| Regulatory changes | Government could increase capital requirements |
| Interest rate changes | Margins affected by rate movements |
| Competition from fintechs | EQ Bank, Wealthsimple eating into market share |
| Single-country bet | All heavily tied to Canadian economy |