The S&P/TSX Composite Index was up 328 points in mid-afternoon trading on July 19. Financials were
one of the best performing sectors – up 2.5% on the day. In this article, I want to look at two of the Big
Six Canadian bank stocks. Indeed, we’ll compare the value between the largest of the Big Six and the
smallest by market cap. Which is the better buy today? Let’s jump in.
Royal Bank (TSX:RY)(NYSE:RY) is the largest of the Big Six Canadian bank stocks and one of the most
significant financial institutions on the planet. Shares of this top bank stock have dropped 9.6% in 2022
at the time of this writing. Investors can expect to see its third quarter fiscal 2022 results in late August.
In Q1 2022, Royal Bank delivered net income growth of 6% to $4.3 billion. Meanwhile, diluted earnings
per share (EPS) jumped 7% to $2.96. Royal Bank has had a solid start to 2022, but investors should
expect headwinds as banks battle rising interest rates and a slowing economy.
National Bank (TSX:NA) is the smallest of the Big Six but a huge bank in its home province of Quebec. Its
shares have dropped 11% so far this year. That has pushed the stock into negative territory compared to
the same period in 2021.
The bank delivered net income growth of 11% to $893 million in the second quarter of 2022.
Meanwhile, diluted EPS jumped 13% to $2.55.
Royal Bank stock currently possesses a favourable price-to-earnings ratio of 10. It offers a quarterly
dividend of $1.28 per share, representing a 4.1% yield. Meanwhile, National Bank last had an attractive
P/E ratio of 9. The bank stock last paid out a quarterly distribution of $0.92. That represents a
comparable 4.1% yield.
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