Investors are likely familiar with the major U.S. banks such as JP Morgan Chase (JPM) or Goldman Sachs (GS). But income investors should consider Canadian banks, particularly those looking for value and income.

Canadian bank stocks tend to trade at lower valuations, along with higher dividend yields than their U.S. peers. As a result, the Canadian banks could be attractive for income investors looking for high yields.

Bank of Montreal (BMO)

Bank of Montreal was formed in 1817, becoming Canada’s first bank. The past two centuries have seen Bank of Montreal grow into a global powerhouse of financial services and today, it has about 2,000 branches (including Bank of the West branches) in North America.

It generates about 45% of earnings from the U.S. (including Bank of the West) and the rest primarily from Canada. Bank of Montreal generates about 64% of its adjusted revenue from Canada and about 36% from the U.S.

Bank of Montreal reported strong fiscal Q3 2025 financial results on 8/26/25. For the quarter, compared to a year ago, revenue rose 9.7% to C$9.0 billion, while net income rose 25% to C$2.3 billion and diluted earnings per share rose 27% to C$3.14.

Provision for credit losses fell 12% to C$800 million, while non-interest expense rose 5.5% to C$5.1 billion. The PCL on impaired loans to average net loans and acceptances was 0.45% for the quarter, down from 0.50% a year ago. The bank’s common equity tier 1 ratio remained solid at 13.5%, up from 13.0% a year ago.

The fiscal year-to-date results provide a bigger picture. Revenue rose 13% to C$26.9 billion, PCL rose 28% to C$2.9 billion, and non-interest expense rose 3.2% to C$15.6 billion. Adjusted net income climbed 14% to C$6.7 billion and the adjusted EPS climbed 14% to C$8.89.

BMO has increased its dividend for 12 consecutive years and the stock currently yields 3.9%.

Toronto-Dominion Bank (TD)

Toronto-Dominion Bank traces its lineage back to 1855 when the Bank of Toronto was founded. It is now a major bank with C$1.9 trillion in assets. The bank produces about C$14 billion in annual net income each year.

TD reported fiscal Q3 2025 earnings results on August 28th, 2025. For the quarter, TD generated adjusted revenue growth of 9.7% to C$15.6 billion. Provision for credit losses fell 9.4% to C$971 million.

Adjusted net income came in 6.2% higher to C$3.9 billion with the adjusted earnings per share rising 7.3% to C$2.20. The adjusted return on equity was 13.2%, down from 14.1% a year ago.

The fiscal year-to-date results provide a bigger picture with the adjusted revenue rising 9.3% to C$45.8 billion and PCL rising 12% to C$3.5 billion.

Ultimately, adjusted net income rose marginally by 0.4% to C$11.1 billion and the adjusted EPS rose 1.6% to C$6.19. Its PCL ratio as a percentage of average net loans and acceptances was 0.50%, up from 0.46% from a year ago.

From 2015 to 2024, the bank increased its EPS by 5.5% per year (and DPS by 7.2%). Fiscal year 2020 was one of those abnormal years with a pandemic triggering a decline in TD earnings. Results rebounded strongly in the subsequent year. After TD maintained its quarterly dividend for seven consecutive quarters, it raised its dividend as soon as the regulator lifted the ban as a safety measure against pandemic-linked disruptions to the economy. We estimate EPS and dividend growth to be 5.5% per year through 2030.

TD has increased its dividend for 14 consecutive years and currently yields 4.1%.

Bank of Nova Scotia (BNS)

Bank of Nova Scotia (often called Scotiabank) is one of the Big Five Canadian banks. Scotiabank reports in four core business segments – Canadian Banking, International Banking, Global Wealth Management, and Global Banking & Markets.

Scotiabank reported fiscal Q3 2025 results on 8/26/25. For the quarter, revenue rose 13% year over year to C$9.5 billion, while non-interest expenses rose 2.8% to C$5.1 billion.

Provision for credit losses fell 1.0% to C$1.0 billion. Net income came in C$2.5 billion, up 32% from a year ago. Ultimately, the diluted earnings per share jumped 30% to C$1.84. Return on equity (ROE) was 12.2% compared to 9.8% a year ago.

The bank’s PCL as a percentage of average net loans & acceptances was 0.55% and the PCL on impaired loans as a percentage of average net loans & acceptances was 0.51%; these figures were unchanged compared to last year.

Adjusted net income came in at C$2.5 billion, up 15% from a year ago. And adjusted EPS rose 15% year over year to C$1.88. Adjusted ROE was 12.4% versus 11.3% a year ago. The bank’s capital position remained stable with the Common Equity Tier 1 ratio at 13.3%, flat versus a year ago.

The bank’s competitive advantage is in its international growth strategy, as it is willing to acquire growth outside of its primary markets. When the global economic environment improves, its international strategy should be an advantage for growth. Scotiabank’s international focus is on Latin American geographies like Mexico, Peru, and Chile.

During the Great Recession, Bank of Nova Scotia increased its dividend and only froze its dividend in fiscal year 2010 before resuming dividend growth afterwards. Similarly, the OSFI regulatory restriction led to a dividend freeze because of the pandemic (and potential impacts to the economy). The bank came out with a dividend increase as soon as the ban was lifted.

BNS normally has a payout ratio of around 50% that aligns with other big Canadian banks. BNS stock currently yields 5.0%.

Disclosure: No positions in any stocks mentioned

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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul.