3 Top High-Yield Bank Stocks to Buy in November

Investing in high-yield bank stocks can provide a steady income stream and long-term growth potential. As we approach November, consider adding these three top bank stocks to your portfolio.
1. KeyCorp (KEY) - A regional U.S. bank with a 4.7% dividend yield, KeyCorp recently received a $2.8 billion cash infusion from the Bank of Nova Scotia (BNS). This deal allows KeyCorp to reposition its balance sheet and maintain its dividend, despite potential short-term earnings volatility. Although investors may be taking a wait-and-see approach, the cash injection signals confidence in KeyCorp's long-term prospects.
2. Toronto-Dominion Bank (TD) - Toronto-Dominion Bank has a 5.3% dividend yield, more than twice the average bank yield. Although the bank faces a setback in its U.S. growth plans due to an asset cap imposed by regulators following money-laundering issues, its Canadian operations remain unaffected. To revive its U.S. growth plans, TD must regain regulator trust by updating internal controls and paying a roughly $3 billion fine. Once the asset cap is lifted, TD can resume its growth trajectory, providing investors with a high dividend yield in the meantime.
3. Bank of Nova Scotia (BNS) - With a 5.8% dividend yield, Bank of Nova Scotia is worth considering in November. The bank has been shifting its focus from Central and South America to becoming a banking powerhouse from Mexico to Canada, including increasing its U.S. exposure through investments like KeyCorp. This strategic shift aims to reduce market volatility and improve overall performance, benefiting long-term dividend investors.
High-yield bank stocks aren't always great investments, but understanding the reason for the high yield is crucial. In the case of KeyCorp, Toronto-Dominion, and Bank of Nova Scotia, the high yields are due to longish turnarounds, but investors are getting paid well via lofty dividend yields. If you can handle owning low-risk plays, these banks are worth adding to your portfolio in November.
In conclusion, investing in high-yield bank stocks can provide a steady income stream and long-term growth potential. By understanding the underlying reasons for the high yields and considering the long-term prospects of these banks, investors can make informed decisions about adding KeyCorp, Toronto-Dominion, and Bank of Nova Scotia to their portfolios.