Bank stocks have seen their valuations drop in value in recent weeks as poor earnings results have sent investors into selling mode. Big names like Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and Royal Bank of Canada (TSX:RY)(NYSE:RY) have been among the more notable financial stocks to be struggling as of late.
However, one of the more intriguing options for investors may be Laurentian Bank (TSX:LB). At a market cap of under $2 billion, it’s nowhere near TD or RBC’s size, but that could also be a good thing as there could be more room for it to rise in value.
Down 6% in the past month, Laurentian’s dividend is now yielding 6.1%, which is a very high payout for what’s generally a pretty safe investment. The stock is also a very good value buy, trading at around 11 times earnings and at just 0.8 times its book value.
Over the years, Laurentian has produced solid, consistent results. In fiscal 2019, the company generated earnings of $173 million on sales of $969 million. And in each of the past four fiscal years, the bank’s revenue has been at least $915 million.
Laurentian may not generate significant capital gains for investors but it can be a terrific source of dividends.
The bank stock has regularly increased its payouts over the years. Five years ago, dividend payments were just $0.54 every quarter and have since grown to $0.67.
That’s an increase of 24% that averages out to an annual growth rate of 4.4% per year. For long-term investors, Laurentian will provide stability and long-term dividends that can help grow their portfolios for decades.
