The best Canadian bank stocks to invest in now

Updated: May 20, 2025

Over the years, Canada’s banking sector has consistently shown a high degree of resilience and stability despite market challenges. This makes Canadian bank stocks an attractive option for investors looking for stable returns and long-term growth.

Choosing bank stocks that offer a good balance of financial performance, growth potential, and market positioning is crucial to achieve these financial goals. To help in your investment journey, Wealth Professional lists the best-performing Canadian bank stocks in this guide. Read on as we go over the industry’s top performers.

Top 8 bank stocks to buy in Canada right now

To come up with the list, our research team used data from the charting platform TradingView. Our choices are based on various performance metrics that help provide a picture of each stock’s value, profitability, and financial health.

Our list is arranged by market capitalization. Note that the figures here are for informational purposes only. They are not intended for trading. If you need guidance on finding the best Canadian bank stocks that align with your investment goals, it’s best to consult with an experienced financial advisor.

These are the top performers based on our research. Data is accurate as of May 7, 2025. If you want a more complete assessment, we suggest that you also gather information from other sources, so you can compare.

1. Royal Bank of Canada (RY)

Market cap: $235.89 billion
P/E ratio: 13.59
Basic EPS: $12.31
Dividend yield: 3.47%
Dividend payout ratio: 46.32%

Canada’s largest bank in terms of market cap and total assets, Royal Bank of Canada (RBC) is growing faster than its competitors. RBC still has a solid growth rate, delivering a considerable 5.9 percent growth in earnings for the past five years. Royal Bank stock is relatively affordable, trading for 13 times its earnings.

RBC has also made a significant acquisition: HSBC Canada, a subsidiary of one of the UK’s largest banks. The deal is said to be worth $13.5 billion and can potentially increase the profits of RBC to a billion more each year. To date, this deal is deemed by far the largest single acquisition in Canada’s banking history.   

Check out this guide on Royal Bank stock for the latest pricing and analysis.

 2. Toronto-Dominion Bank (TD)

Market cap: $154.46 billion
P/E ratio: 18.70
Basic EPS: $4.72
Dividend yield: 4.69%
Dividend payout ratio: 87.09%

Another top Canadian bank stock worth buying now is Toronto Dominion (TD). The banking giant is known for its strong customer focus and innovative banking solutions. With significant footprints in both the Canadian and US financial markets, TD can provide investors with broader market access.

TD bank stock has consistently delivered dividend growth alongside solid earnings growth. This makes it an appealing investment for those seeking long-term returns and stability. Recently, TD was named Canada’s most valuable brand, beating all its competitors. The brand is worth over $23 billion.

Find out if TD bank stock is a good investment option in this guide.

 3. Bank of Montréal (BMO)

Market cap: $98.41 billion
P/E ratio: 12.72
Basic EPS: $10.63
Dividend yield: 4.65%
Dividend payout ratio: 58.33%

As one of Canada’s oldest established banks, Bank of Montréal (BMO) has a solid reputation of competency in delivering quality financial services. It provides personal and commercial banking, investment banking, and wealth management.

BMO is reputed for its consistent dividend payout. It has been providing dividend distributions since 1829. BMO’s dividend of 4.65% is also one of the best among all Canadian bank stocks.

Wondering whether BMO bank stock is worth the investment? Find out in this guide.

 4. Bank of Nova Scotia (BNS)

Market cap: $85.83 billion
P/E ratio: 14.27
Basic EPS: $5.06
Dividend yield: 6.15%
Dividend payout ratio: 83.71%

Bank of Nova Scotia (Scotiabank) prides itself on its extensive operations beyond the country’s borders. Scotiabank has significant interests in Latin America and could provide investors with the unique opportunity of exploring emerging markets.

Scotiabank maintains a solid track record of resilience and the capacity to pay out dividends even during an economic downturn. This was evident in the first two years of the pandemic, when its bank stock’s price spiked 106%.

Currently, Scotiabank is shifting its focus to the US and Mexican markets. Part of this effort is the acquisition of a stake in US-based lender Keycorp in a deal worth US$2.8 billion. The deal provides strong growth potential for the banking giant.   

Learn more about the benefits and drawbacks of investing in Scotiabank stock in this guide.

5. Canadian Imperial Bank of Commerce (CM)

Market cap: $82.47 billion
P/E ratio: 11.44
Basic EPS: $7.73
Dividend yield: 4.25%
Dividend payout ratio: 47.50%

The Canadian Imperial Bank of Commerce (CIBC) is yet another established bank with a strong market presence in Canada. CIBC focuses mainly on providing banking and financial services to businesses, institutions, and individuals.

In the past 10 years, CIBC has focused much of its growth efforts on the country’s residential housing market. This exposure led big gains to its bank stock. However, this also made the stock more vulnerable to a market crash, which has been largely prevented by soaring interest rates in the past few years.

CIBC has also expanded into the US through major acquisitions, including:

• Atlantic Trust Private Wealth Management (2014)
• The PrivateBank, which later became CIBC Bank USA (2017)
• Cleary Gull (2019)
• Lowenhaupt Global Advisors (2019)

CIBC also owns Simplii Financial, one of the most popular neobanks in Canada.

Find out if CIBC bank stock fits your investment goals in this guide. 

 6. National Bank of Canada (NA)

Market cap: $47.93 billion
P/E ratio: 11.27
Basic EPS: $10.98
Dividend yield: 3.72%
Dividend payout ratio: 40.08%

A prominent bank in Québec, the National Bank of Canada offers financial services to individuals and businesses. The bank’s strong regional presence allows it to focus on giving more personalized solutions to its customers.

National Bank has consistently delivered dividends along with excellent financial results, so its stock is a good choice for investors seeking diversification and exposure to the Québec market.

A key differentiator of National Bank stock is its relatively low price-to-earnings (P/E) ratio. This shows that it may be undervalued compared to other Canadian bank stocks. National Bank can be a good option for investors searching for affordable stocks with strong fundamentals.

Is buying National Bank stock a good idea? Find out in this guide.

 7. EQB Inc. (EQB)

Market cap: $3.66 billion
P/E ratio: 9.37
Basic EPS: $10.31
Dividend yield: 2.14%
Dividend payout ratio: 18.63%

Previously known as Equitable Group Inc., EQB Inc. serves more than 360,000 Canadians through its digital subsidiary Equitable Bank, Canada’s Challenger Bank. Equitable Bank is the country’s seventh largest independent bank. It provides personal and commercial banking services through the eqbank.ca platform.

Equitable Bank is one of the best stocks to buy in Canada for investors looking for strong growth potential at an attractive price point. Its earnings are predicted to grow 9.6 percent per year. The bank stock is also trading at over 60 percent of its estimated fair value.

8. VersaBank (VBNK)

Market cap: $495.26 million
P/E ratio: 11.96
Basic EPS: $1.29
Dividend yield: 0.66%
Dividend payout ratio: 7.73%

VersaBank became the world’s first fully digital financial institution in 1993. It achieved this status by using proprietary cloud-based technology to operate a branchless business-to-business model. It focuses its growth efforts on underserved markets in Canada and the US.

VersaBank’s Receivable Purchase Program (RPP) is known in the financial markets for providing digital funding to companies. It also has a US-based cybersecurity subsidiary, which focuses on addressing cyber threats against the financial market, businesses, and government agencies.

These units position the company for growth. In the past few years, VersaBank reported strong financial results, including high return of investment. This shows its ability to earn profits.

Here’s a side-by-side comparison of the best bank stocks to buy in Canada right now:

What are the key indicators of a good bank stock?

There are various metrics that serve as indicators of a stock’s value and growth potential. Here are some key indicators to look at before investing in bank stocks:

• Market capitalization, also referred to as market cap, is the total value of the company’s shares of stock. Market cap can give investors a clearer picture of the company’s size relative to its competitors. This is calculated by multiplying the total number of outstanding shares by their share price.
• Price-to-earnings (P/E) ratio indicates whether a stock’s price is high or low relative to the company’s earnings. To arrive at this figure, the company’s current share price is divided by its earnings per share (EPS).
• Earnings per share indicate how much profit a company makes for each share of stock. It is calculated by subtracting preferred dividends from a company’s net income then dividing the difference by the number of outstanding shares.
• Dividend yield indicates how much a company pays in dividends yearly, relative to its stock price. To arrive at the dividend yield, the annual dividend per share is divided by the price per share.
• Dividend payout ratio (DPR) tells how much a company pays out to investors in dividends, in comparison to the earnings of the stock. The ratio is calculated by dividing the annual dividend per share by the EPS. DPR shows how well a company’s earnings can allow for dividends.  

 If you're looking for a different type of investment, this list of the top-performing mutual funds in Canada can be a good alternative.

Why invest in Canadian bank stocks?

Generally, it’s wise to invest in bank stocks of any of the Big Five (or Six, when the National Bank of Canada is considered) because of their resilience, solid reputation, and dividend payments. Investors can rely on shares of these banks to grow reliably and consistently, even during uncertain times or financial crises.

However, not all the best bank stocks are always from the Big Five. There may be times when these banks fall off the list and smaller banks take their place. This can occur due to market volatility, acquisitions, mergers, and other factors.

Most banks in Canada are renowned for their conservative lending policy, so they’re less prone to any shocks (or aftershocks) in the global economy or financial markets. Their conservative approach to lending can also lead to better investments in other companies. This also enables them to pay out dividends.

If you need help deciding which bank stocks to buy, an experienced financial advisor can help. Our Best in Wealth Special Reports page is the place to go if you want guidance from the industry’s best and brightest.

The companies and professionals featured in our special reports are recognized as respected and reliable market leaders. By partnering with these industry experts, you can be sure that you’re getting the best advice in your investment journey.

What do you think of the best Canadian bank stocks on our list? Let us know in the comments