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3 Top High-Yield Bank Stocks to Buy in November

AInvestSaturday, Nov 9, 2024 3:41 am ET
1min read

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.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.