The Big Six Canadian bank stocks have reported their fiscal Q1 2020 results in the last week or so, with the stocks dipping by 4-8%, as shown in the graph below.An industry-wide dip in the banking sector only means one thing: the market lacks confidence about the current economic environment and expects slower economic growth, which would impact bank earnings.Reviewing the recent metrics of the big Canadian banks gives hints on which may be the best ones to buy for 2020 and beyond.One key factor that global economic growth is expected to be slower this year is coronavirus COVID-19.The impacts of the novel coronavirus COVID-19 health emergency are far and wide, spreading across humanity and creating a chain reaction that travels across sectors.Indeed, low energy prices have been further pressured lately triggered by expected lower global demand.
The company’s payout ratio is only 49%, which is among the lowest in the sector.The company is the most internationally diverse bank stock in Canada with operations around the world.
This leaves our banks well capitalized and financially healthy. Add that to the dividend yield and total upside potential could easily exceed 15%.Investors will have to keep an eye on CIBC’s growth south of the border, as the company has often been criticized for being too exposed to the Canadian economy.Investors are hesitant because of this exposure, and as such CIBC was the worst performing bank in both 2018 and 2019 and has been one of the worst performing Canadian banks in the past 5 years.BMO provides a wide range of banking services, including wealth management, investment banking, personal banking and business banking, in both Canada and the United States. Stocktrades offers strictly investment opinions, not investment advice. It was the first major Canadian bank to expand into the U.S. market.The company is currently ranked 4th out of Canada’s Big 5 banks in terms of market cap.The company is actively looking to adapt to today’s investment trends, including launching its Smartfolio platform.Smartfolio is a Robo-Advisor platform, and BMO was the first big 5 bank to move into this part of the market, although it now has competition. The post COVID-19 Reveals the Best Canadian Bank Stock to Buy in 2020 appeared first on The Motley Fool Canada. If Canada’s economy underperforms, TD Bank still has its U.S. assets to drive revenue.Over the last 5 years the company has a compound annual growth rate of over 10% on its earnings and has a medium-term earnings growth target of around 7-10%, although we’re more likely to see tepid earnings this year because of a weaker Canadian economy and COVID-19.TD has posted the best growth rate of the major Canadian banks over the last 5 years.The company current pays a yield of 5.18%, has raised dividends for 9 straight years and has a 5-year dividend growth just shy of 10%, the best growth rate on this list. Remember, shares are off significantly thanks to the poor economy and COVID-19.The company has one of the best dividends in the country, yielding 4.64% at the time of writing.
It’s exactly why they’re some of the The Canadian banking market is highly regulated and as such, there are massive barriers to entry. The company is trading at a forward price to earnings of just over 10.5x and just a little above book value.
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best canadian bank stocks to buy in 2020