Canada’s big banks have collectively raised the dividends they pay to shareholders.
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Canada’s five largest lenders tend to operate in concert with one another rather than as competitors, offering nearly identical interest rates and charging the same fees. However, the dividend payments vary slightly from one bank to another.
The dividend increases from each bank are as follows:
- Royal Bank of Canada (RY): Raises dividend 6% to $1.64 per share from $1.54 previously
- Toronto-Dominion Bank (TD): Increases dividend 3% to $1.08 from $1.05
- Bank of Montreal (BMO): Hikes its dividend 2% to $1.67 from $1.63
- Canadian Imperial Bank of Commerce (CM): Lifts its dividend 10% to $1.07 from $0.97
- Bank of Nova Scotia (BNS): Raises dividend 4% to $1.10 from $1.06
Improving Earnings
The dividend increases come as each Canadian bank reported decent financial results for the year’s third quarter. Each bank saw its balance sheet improve as they were required by regulators to set aside less money to cover potentially bad loans.
Royal Bank of Canada, the country’s biggest lender, reported earnings per share (EPS) of C$3.85 for the quarter ended Oct. 31, up from a profit of C$3.07 a year ago. Revenue in the quarter totaled C$17.21 billion, up from C$15.07 billion in the same period of 2024. Analysts had expected Royal Bank to report profit of C$3.53 per share.
Is RY Stock a Buy?
Royal Bank of Canada’s stock has a consensus Strong Buy rating among nine Wall Street analysts. That rating is based on seven Buy and two Hold recommendations issued in the last three months. The average RY price target of C$237.87 implies 6.24% upside from current levels.
