Dividend income investors may rely on Canadian financial institutions for steady income and growth. In the last quarter, TD Bank (TD), Royal Bank (RY), and Bank of Montreal (BMO) all posted good results. CIBC (CM) is the outlier. Its stock stumbled after it posted disappointing results.
CIBC trades at good value after the stock fell. The company earned $1.39 a share on revenue of $5.39 billion. Both figures missed consensus estimates. CIBC’s provision for credit losses is troubling. It rose to $436 million, up by 459% Y/Y.
TD earned $2.18 a share on revenue of $12.25 billion. The bank rewarded shareholders with a 7.9% dividend hike, to 96 cents a share. Investors thought it would only raise rates by 3%-4% annually. They braced for a recession and real estate concerns.
Royal Bank overshadowed its PCL increase and flat earnings with its HSBC Canada acquisition. It will pay $13.5 billion to acquire the Canadian operations of the Asian bank. RBC is spending a meaningful amount to get 2% more in market share from HSBC.
While Scotiabank is compelling, so too is the Bank of Montreal. BMO offset its earnings drop by growing its loans. It also grew its U.S. P&C banking.
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