Many Canadian investors who look at bank shares can go directly to the top. Admittedly, that is certainly a great place to start! But there are other bank shares to consider, especially if you are looking for more growth and income from dividends.
That’s why we look at today Bank of Nova Scotia (TSX: BNS), National Bank (TSX: NA) and EQB (TSX: EQB) as strong options. We will see whether these shares are stacking when it comes to profit coverage, capital strength, profitability and business mix. That way you can not only get dividends, but also value.
AFTER
Firstly, we have National Bank, which looks very tempting after integration with the Canadian Western Bank. The acquisition caused a double digit of adapted growth and offered a stronger capital position. Investors saw the performance improvements during the third quarterly report, with an adapted net income by 15% year on year, adapted net income with 19% and a broad segment growth.
But even with the growth and acquisitions, the dividend looks strong with a payment ratio of only 44% from writing. This yield of 3.1% is treated comfortably, especially with a CET1 that is comfortable at 13.9%. All in all, the dividend front views look high, with a strong capital that comes in and enough room to continue to increase that dividend.
EQB
Then we have EQB, which is a little different from the Big Six Banks. This bank share leans more to digital banking, reverse mortgages and insured multi-unit loans. These are areas that can support steady growth, even when the traditional mortgage mitigates. And with a strong CET1 of only 13.3%it is also well supported.
Strong performance was seen during the profit of the third quarter, with an adapted net income by 32%. However, the provisions for credit losses (PCL) have risen, with net reduced loans by 1.6% of the loans. Nevertheless, EQB customers grew by 21%and with a small payment ratio of 23%it is no wonder that it recently increased the dividend by 17%. Now investors can grab a yield of 2.4% from writing.
BNS
Finally, we have Scotiabank, an income game that has yielded dividends since the 1830s. Moreover, it is a solid choice because after the profit price it recovers in the share price and yields a dividend yield of 4.9%. In the third quarter, sales yielded by 15.5% increased by a profit per share (EPS) by 30.4%. While the return on equity (roe) is around 8.6%, lower than colleagues, it is still due to a turnaround.
That turning comes from his investment in Latin -American emerging markets, and we see positivity here. In the meantime, investors can hold the share while acting with only 11.4 times income and 1.5 times book value. The payment ratio is higher at 82%, but still sustainable. I am also looking forward to it, it also seems that it will have many future dividend payments in the future.
Bottom Line
If you are looking for dividend shares to help you through the difficult times, these three bank shares are top options. After the most durable with strong capital, a low dividend payment and growing income to support a steadily increasing dividend. EQB has a very low payment and strong capital, but growth can come and go through credit and housing cycles. In the meantime, BNS has a sustainable dividend, but a high payment can delay the dividend growth.
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