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Canadian Sunset
Lone Primate / Foter / CC BY-NC-SA

In this series I’m going to take a look at the Canadian Banking Sector. If you talk to most Canadian dividend growth investors I think you will find that Canadian banks make up a significant portion of their portfolio. Canadian banks have reasonably high dividend yields, have performed well historically and they used to have very impressive dividend streaks with strong dividend growth until the global financial crisis hit.

When the crisis hit, the Canadian banks held their dividends steady while they navigated through the troubling times. Compared to other foreign banks, Canada stacked up very well, as a lot of other banks were cutting their dividends. Now that the financial crisis is over the Canadian banks have started increasing their dividends again and dividend investors are hoping that the banks get back to their old ways.

The Canadian banking industry is made up primarily of the “Big Six”:

  1. Toronto-Dominion Bank
  2. Royal Bank of Canada
  3. Bank of Nova Scotia
  4. Canadian Imperial Bank of Commerce
  5. Bank of Montreal
  6. National Bank

In this series I am going to go over each of the big 6 banks individually, along with all of the banks currently in the Canadian Dividend All-Star List. The Canadian Dividend All-Star List tracks companies that have recorded more dividends each calendar year for five or more consecutive years. As it stands now (June 2013), the Canadian Dividend All-Star List has two banks: Canadian Western Bank which has a dividend streak of 21 years and Laurentian Bank which has a dividend streak of 5 years. These two banks are relatively small players in the industry compared to the big six, but I thought they should be included as they managed to increase dividends in a time when other banks weren’t able to.

This post will act as a starting point of a 10 part series. That’s right I said 10 part series. I know this is a long series, but I feel that Canadian banks are an important component of a successful dividend growth strategy, so I wanted to cover the topic properly. Over the next few weeks I’m going to cover the following 10 topics.

The Great Canadian Banking Series

  1. An Introduction to the Great Canadian Banking Series (the article you are reading now)
  2. Bank of Nova Scotia Dividend Stock Analysis
  3. Toronto-Dominion Bank Dividend Stock Analysis
  4. Royal Bank Dividend Stock Analysis
  5. Canadian Imperial Bank of Commerce Dividend Stock Analysis
  6. Bank of Montreal Dividend Stock Analysis
  7. National Bank Dividend Stock Analysis
  8. Canadian Western Bank Dividend Stock Analysis
  9. Laurentian Bank Dividend Stock Analysis
  10. Conclusion: Which banks are the best from a dividend growth perspective

As I write each article, I’ll update the topics above with the new links so you can more easily navigate the series.

In each bank dividend stock analysis you will get a detailed overview of its financial past, an estimate of future dividend growth, my target buy price, and a summary of how the profiled bank stacks up against the competition. It’s my hope that by the end of this series you should have a pretty good understanding of the major players in the Canadian banking industry.

Keep your eyes out for part 2 of the series. In part 2 I will be reviewing Bank of Nova Scotia.

Disclaimer

I own shares of Bank of Nova Scotia and Royal Bank of Canada. You can see my portfolio here. I am a blogger and not a financial expert. These writings are my own opinions and should not be considered financial advice. Always perform your own due diligence before purchasing a stock.

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