2 Workhorse Bank Stocks to Keep Buying in 2026

The bank stocks have been really heating up in recent quarters and for good reason. With interest rates poised to stay low and perhaps move lower into the back half of the year, I think the tides could stay on the sides of the big banks. With banks on both sides of the border scoring incredible past-year returns, the big question for investors underweight the financial sector is whether it’s too late to punch one’s ticket to their favourite batch of bank stocks.

And if the valuations still make sense, which names are worth picking up here? While you can’t go wrong with any of the Big Six Canadian banks, I do think that investors seeking relative value might wish to consider the following names.

Though they’re still incredibly hot, with huge double-digit percentage gains in the past year, I find that the road ahead (the next year or two) is still impressive. And though yields are quite compressed and less appealing to the passive income crowd out there, I still find the following pair to be absolute workhorses that can keep delivering, especially on the growth front.

So, whether you want dividend growth or capital gains, as the banks feel the full force of a cyclical upswing, consider the following as buyable or, at the very least, watchable for one’s radar.

Bank of Montreal

First, we have shares of Bank of Montreal (TSX:BMO), which were up 30% in the past year and 42% in the last two years. That’s considered a decent, but still relatively mild gain as far as the big Canadian banks are concerned. I view the relative underappreciation as more of an opportunity, especially as the bank continues growing in commercial banking south of the border while gaining traction within the wealth management department.

As the ETF business and capital markets continue to gain speed, I like where shares of BMO are headed in 2026. At 16.1 times trailing price-to-earnings (P/E), BMO stock goes for a fair price, in my view. And the 3.6% dividend yield, though smaller than where it was two years ago, is still worth going after, especially considering the dividend growth on the horizon.

National Bank of Canada

National Bank of Canada (TSX:NA) is another Canadian bank that investors shouldn’t forget about, especially after outclassing many of its peers in the past two years, with 73% in gains over the timespan. Though investors haven’t had much of a chance to do much dip-buying in the past four months, I do think that the recent slowing of momentum might be enough of an opportunity to initiate a starter position.

With a wide moat around the Quebec market and the ability to expand further across Canada, I like the growth profile. Combined with strong managers who know how to execute, the premium 17.3 times trailing P/E multiple may not be all too excessive, given earnings momentum is back in the green. Though, the 2.9% dividend yield is certainly on the low end, especially for new investors seeking to get an initial position. Perhaps a near-term pullback and big dividend raise could change that!

The post 2 Workhorse Bank Stocks to Keep Buying in 2026 appeared first on The Motley Fool Canada.

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More reading

• Take Full Advantage of Your TFSA With These 5 Dividend Stars
• 3 Blue-Chip Stocks Every Canadian Should Own
• 2 Canadian Bank Stocks to Buy at a Discount
• 7 Top-Tier Canadian Stocks That Just Bumped Up Dividends (Again!)
• Transform Your TFSA Into a Cash-Generating Machine With $10,000

Fool contributor Joey Frenette has positions in Bank of Montreal. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.