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Summary
- The S&P/TSX financial index is up 2.75 per cent quarter-to-date.
- Bluechip bank stocks such as Royal Bank of Canada (TSX:RY) and Bank of Montreal (TSX:BMO) provide attractive quarterly dividends to their shareholders.
- RY’s three-year dividend growth stands at 7.30 per cent while BMO’s is 13.28 per cent.
The Bank of Canada earlier forecast that the country’s economy will bounce back by 1.8 percent in 2021. And banks are generally the first line of indicators of a nation’s economic progress. After a massive plunge during the 2020 March market crash, the TSX Financial index is now on rebound path and current up 2.75 per cent quarter-to-date.
Top Canadian bank stocks such as the Royal Bank of Canada (TSX:RY) and the Bank of Montreal (TSX:BMO) have displayed strong financial reports in latest their quarter and provide attractive quarterly dividend to their shareholders. Let us look at the market fundamentals of these two bluechip stocks:
Royal Bank of Canada (TSX:RY)
Quarterly Dividend: C$ 1.08
The second largest Canadian lender has a current dividend yield of nearly 4 per cent, as per TMX data. RY delivers a three-year dividend growth of 7.30 per cent. The large cap stock has returned almost 7 per cent in one year.
The blue-chip stock’s return on equity is 14.08 per cent along with a price-to-book (P/B) ratio of 1.913, and a price-to-earnings ratio of 13.80. The bank stock ranks among TMX’s top volume and top financial companies.
In the financial earnings for the full fiscal 2020, the bank posted a net income of C$ 11,437 million, a drop of 11 per cent year-over-year (YoY).
Bank of Montreal (TSX:BMO)
Quarterly Dividend: C$ 1.06
BMO’s Board of Directors supported a quarterly dividend of C$ 1.06 per common share for the ongoing quarter. The lender stock holds a present dividend yield of 4.188 per cent, with three-year dividend growth of 13.28 per cent.
This bluechip stock has gained approximately 4 per cent in one year. Its current return on equity is 10.13 per cent and 0.54 per cent return on assets. The stock has outperformed the market (TSX and TSXV) with its last month’s price performance.
The dividend-paying company recorded earnings per share of C$ 2.37 in Q4 FY20, a 33 per cent rise from C$ 1.78 EPS in the fourth quarter FY19.
The return on equity in Q4 FY20 stands 12.4 per cent, as compared to 9.9 per cent a year ago.
