Explore key insights into Laurentian Bank (TSX: LB) stock. In this guide, we’ll discuss what to consider before buying this stock as well as key indicators for viability
Bank stocks are often seen as a safe and steady choice for long-term investors. In Canada, they are especially popular because the country's banking system is known for being strong and reliable. These stocks can offer stable dividends and tend to hold up well even during economic ups and downs. That's why many investors continue to include Canadian bank stocks—like Laurentian Bank's—in their portfolios.
In this article, Wealth Professional will discuss what you need to know about Laurentian Bank of Canada stock. We'll compare key financial indicators to see if this bank stock is viable for investment. Want to help your clients decide whether buying Laurentian Bank stock is a good buy? Read on for more.
Is Laurentian Bank (TSX: LB) stock a good buy?
The most important question is whether Laurentian Bank of Canada stock is worth your clients' time and money. At first glance, its fundamentals appear to be solid. However, reports point out some uncertainties.
For instance, in mid-2023, Toronto-Dominion Bank and Scotiabank were considering buying Laurentian Bank. But both banks walked away after a strategic review created uncertainty around the sale and reduced the chance of a bidding war.
The withdrawal of potential buyers like TD Bank and Scotiabank has reduced the likelihood of a sale, impacting the stock's performance. Analysts suggest that the stock might still experience a gradual decline until the bank provides clarity on its strategic direction.
What is happening with Laurentian Bank?
For those thinking about buying, it might be wise to wait. The bank has just gone through a major shift. Its public shares and commercial lending were sold to Fairstone Bank of Canada. Then, its retail and small business banking operations were sold to National Bank of Canada.
As such, waiting could help investors avoid potential losses and provide opportunities to invest in more stable or profitable stocks.
Check out this video that talks about the strategic review that made potential buyers back out. The presenters explain how, more than a year ago, Scotiabank wanted to grow in Québec and TD had extra funds to spend. But after the review, both banks decided not to move forward:
After the failed sale, Laurentian Bank announced CEO Rania Llewellyn's resignation, further plunging Laurentian Bank stock. Laurentian has since hired three independent directors to focus on improving the bank's performance.
Should your clients invest in Laurentian Bank stock?
Before buying Laurentian Bank stock (or any stock for that matter), it's vital for your clients to consider these four indicators first:
- market capitalization
- price to earnings (P/E) ratio
- earnings per share (EPS)
- dividend yield
Let's discuss them further below:
1. Market capitalization
This is the total value of a company's shares. The market cap can inform investors of a company's growth potential. This key indicator can also provide a glimpse into the company's standing in its respective industry, as well as how it fares against its rivals.
This is the total value of a company's shares. For Laurentian Bank stock, the market cap sits at about $1.80 billion as of April 2026. This figure helps investors gauge the bank's size and its growth potential. It can also be a glimpse on how a specific bank compares with other financial institutions in Canada.
Laurentian Bank operates across Canada, primarily in Québec and Ontario, and also has activities in the United States. Because of this footprint and its recent transactions with Fairstone Bank and National Bank, its market cap reflects how investors view its position in these regions.
2. Price to earnings (P/E) ratio
The price to earnings ratio helps investors see how much they are paying for each dollar of a company's earnings. In other words, it compares the company's stock price to its earnings per share. Laurentian Bank's current P/E ratio is 14.5 based on its latest financial reports.
Investors often use this to compare the bank's valuation to other Canadian banks. They can also review this figure to judge whether Laurentian Bank stock looks expensive or reasonably priced relative to its earnings.
3. Earnings per share (EPS)
Earnings per share tells investors how much profit a company generates for each share of stock. It is a simple way to connect the company's overall earnings to the individual shares that investors hold.
Laurentian Bank's current EPS is $2.78 on a trailing twelve-month (TTM) basis. When investors look at this bank stock, they can use EPS together with the P/E ratio. This combination helps them understand how the market is pricing the bank's earnings and how those earnings might support future dividends or reinvestment.
4. Dividend yield
Dividend yield is the percentage of a company's share price that it pays out in dividends each year. It helps income-focused investors estimate how much cash flow they can expect from holding the stock.
Laurentian Bank stock has a current dividend yield of 4.63 percent as of this writing. Over the last five years, its average dividend yield has been higher, hovering at 6.06 percent.
What to consider before investing in Laurentian Bank stock
Before buying Laurentian Bank stock or any other investment for that matter, here are a few things that your clients must keep in mind:
- think of the gains without ignoring the risks
- understand your investment
- always diversify investments
Let's take a closer look at each:
Think of the gains without ignoring the risks
Laurentian Bank of Canada stock looks undervalued based on its current price. Figures show how much the stock has dropped in recent months. Even though some investors might see this as a buying opportunity, the risks are hard to ignore.
While the stock still offers decent dividends, it might not be the best pick for those looking for stable growth. Your clients should weigh the potential rewards against the ongoing risks before deciding whether to invest or not.
Understand the investment
The bank recently faced major changes, including a CEO resignation and missed opportunities for acquisition. These shifts make it harder to predict how well the bank will perform in the near future.
It's best to stay up to date on the company's financials and wait for stronger signs of recovery before advising your clients to invest.
Always diversify investments
Your clients shouldn't limit their investments or portfolios to one bank stock or one type of stock alone. Tell them to mix it up with energy stocks and tech stocks. You can also advise them to diversify their investment portfolio with other asset classes like ETFs, mutual funds, REITs, etc.
This can protect against the effects of inflation and make up for any loss or underperforming investments. To know more about diversification, watch this video:
A look back at Laurentian Bank's history
Laurentian Bank of Canada was founded in 1846 by Monsignor Ignace Bourget, the second Bishop of Montreal, and at least 15 other prominent businessmen.
As the bank was established in French-speaking Québec, its original name was Banque d'Épargne de la Cité et du District de Montréal, or Montreal City and District Savings Bank.
Here are some milestones in Laurentian Bank's history:
- 1846: achieved a customer base of 11,000 and $3 million in deposits within 25 years, transitioning to a share capital limited company with a federal charter. The headquarters were established at 262 Rue Saint-Jacques, Montréal
- 1921: celebrated its 75th anniversary, amassing assets of $49 million
- 1939: became the first to incorporate a trust company, establishing the Montréal City and District Trustees, later Laurentian Trust
- 1965: listed its shares of stock on the Montréal Stock Exchange
- 1974-1976: introduced the Bancaide ATM system and reached over $1 billion in assets
- 1983: debuted stock on the Toronto Stock Exchange
- 2000: expanded its services by acquiring Sun Life Trust Company, forming B2B Bank
- 2016: consolidated its Montréal offices to a new location at 1360 Rene Levesque Boulevard West
Laurentian Bank's history and present standing as Canada's ninth largest bank might be impressive. However, these should not be taken as the only signs that Laurentian Bank stock is a great investment. Other indicators, such as those we've discussed earlier, must be used for thorough review.
Is Laurentian Bank safe to invest in?
Laurentian Bank has a strong history, from its founding in 1846 to its position today as Canada's ninth-largest bank. However, recent developments have created some uncertainty. While this stock might appear undervalued and continue to offer dividends, the lack of a clear growth direction makes it a less attractive option for now.
That's why you should remind your clients that investing always comes with risks. Before buying Laurentian Bank stock, tell them to consider the full picture. It might be smarter to wait for more stability or to explore other Canadian banks with stronger momentum.
Check out our investor resources page for other bank stock options.
