Canadian banks are among the finest investments on the market. Many have been round for over 100 years, offering secure earnings and financial savings that present buyers they aren’t disappearing any time quickly. Nevertheless, in terms of worth and development, most Canadian banks have already been there, accomplished that. So at the moment, we’re going to take a look at one Canadian financial institution that’s making main strikes. Strikes that would ship shares greater, whereas nonetheless providing that stability.

Enter Nationwide Financial institution

In case you’re on the lookout for a Canadian financial institution inventory that appears like a winner, Nationwide Financial institution (TSX:NA) may very well be that inventory. The financial institution inventory just lately reported earnings development that buyers may need missed, particularly as these have been masked by usually accepted accounting precept (GAAP) noise. The financial institution inventory reported earnings per share (EPS) down 11% year-over-year, which got here right down to acquisition-related objects. So it didn’t appear like it was off to begin.

Right here’s the factor: adjusted internet earnings grew by 15% and adjusted earnings per share (EPS) remained flat. This was more true to its earnings energy, and income mirrored that. Complete income reached $3.5 billion, up 15%, with provisions for credit score losses at $203 million, up from $149 million the 12 months earlier than. As for these GAAP efficiencies, the ratio worsened to 55.8% from 51.4%, inflicting buyers to fret. But once more, it’s necessary to recollect the corporate’s main acquisition.

Shopping for CWB

So let’s focus on that acquisition, lets? Nationwide Financial institution closed its Canadian Western Financial institution acquisition in February 2025, and it’s already flowing into outcomes. Loans elevated 20%, with deposits up 21% year-to-date. Moreover, synergies are beginning to present as effectively, with income up 21% year-over-year in private and industrial banking, and 13% in wealth. As integration prices sluggish, effectivity ought to enhance even additional.

Now, Nationwide Financial institution has scaled up from a regional Quebec financial institution to a nationwide participant. That’s notably true in Western Canada. And administration sees the potential, with the plan to buy as much as eight million shares. It additionally elevated the dividend by 7%, displaying confidence as effectively.

Worth and earnings

Now buyers can take this chance to get in on development, worth, and earnings. The truth is, the financial institution inventory trades at simply 12.9 instances earnings, cheaper than most international financial institution friends. Moreover, its acquire of about 18% within the final 12 months exhibits there’s room for extra upside, particularly if synergies and earnings circulate via as anticipated.

As for earnings, the present dividend yield of three.2% is a bit decrease, however the current improve may imply extra are on the way in which. Add in buybacks, and buyers get a stability of money earnings at the moment and capital appreciation tomorrow. The truth is, investing $7,000 at the moment may herald $217 in dividends instantly annually!

Backside line

Buyers will wish to take a look at the financial institution inventory’s ongoing synergies when contemplating the inventory to see if that execution meets any roadblocks. But total, it’s a powerful inventory getting stronger. It affords double-digit adjusted earnings development, a rising dividend, and a serious acquisition as a catalyst for the long run. Plus, a share buyback! So in case you’re an investor on the lookout for a financial institution inventory so as to add to your portfolio for long-term earnings, this may very well be the one to beat on the TSX at the moment.