3 main bank stocks that have just been put up for sale
Major Canadian banks adopted the third release of 2021 results in late August and early September. This was another record quarter for Canada’s major financial institutions. The general economic rebound had an extremely positive impact on earnings. However, volatility has hit North American markets as central banks consider their next move in the face of rising inflation. Today I want to look at three bank stocks that have been punished by this decline. Now is the perfect time to jump on those stocks. Let’s go.
Why Canada’s Leading Bank Stock Seems Undervalued Today
Royal Bank (TSX: RY) (NYSE: RY) is the largest financial institution in Canada and the largest share on the TSX by market capitalization. The shares of this bank fell 1% on September 28. Royal Bank shares are still up 20% year-to-date.
In the third quarter of 2021, Canada’s largest bank reported 34% year-over-year net profit growth to $ 4.3 billion. Meanwhile, diluted earnings per share jumped 35% to $ 2.97. Net income for the first nine months of fiscal 2021 increased 48% to $ 12.1 billion, or 50%, per share, to $ 8.39.
Strong earnings aside, this bank stock has a favorable price-to-earnings (P / E) ratio of 11. Royal Bank plunged into technically oversold territory in trading last week. It is still threatening those levels with an RSI of 40 at the time of writing.
CIBC just took a hit but I’m still buying at the end of September
Canadian Imperial Bank of Commerce (TSX: CM) (NYSE: CM) is the fifth largest of the Big Six Canadian banks. This banking stock climbed 32% in 2021. Its stocks fell 1.9% on September 28.
CIBC released its third batch of results on August 26. Like its peers, CIBC had a very good quarter. Total revenue increased 7% from the previous year to $ 5.6 billion. Another trend has been a sharp decline in bad debt provisions at CIBC and other major Canadian banks. This bolstered profits for fiscal 2021.
Shares of this bank stock last had an attractive P / E ratio of 10. It has an RSI of 40, putting it outside technically oversold territory. CIBC last paid a quarterly dividend of $ 1.46 per share, which represents a strong return of 4%.
Here is why I would snatch this Quebec banking action today
National Bank (TSX: NA) is the third and final bank stock that appears to have gone up for sale after a brutal trading session. It is the smallest of the six big banks, but the National Bank remains a power in its home province, Quebec. The shares of this bank stock fell 1.1% on September 28.
This Quebec bank saw its net income increase to $ 839 million or $ 2.36 per share, against $ 602 million or $ 1.66 per share the previous year. National Bank recorded strong growth in each of its major business sectors. It still offers a quarterly dividend of $ 0.71 per share, which represents a yield of 2.9%.
National Bank stock currently has a favorable price / earnings ratio of 11. This constantly under-the-radar banking stock is worth watching as the markets go through this period of volatility and uncertainty.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content.
Foolish contributor Ambrose O’Callaghan has no position in the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.