Investors should note fluctuations can be due to various factors. Inflation, company performance, war, changes in technology, changes in government policy, and other events can affect the banking sector. Looking at the bank’s market cap history, it can be gleaned that National Bank of Canada stock bounces back quickly from market downturns that may cause their market cap to dip.
National Bank of Canada P/B Value Ratio: 1.61 (as of May 2024)
With a P/B value ratio of 1.61 it can be concluded that the stock is quite overvalued. Ideally, a good stock should have a P/B value of 1 or lower, indicating that it’s a stock that is selling for less.
However, NA’s P/B value is still lower than the acceptable limit of 3.0. So, even if it appears to be overvalued, the stock is still viable. It helps to look at the other indicators to determine whether NA stock is a good investment.
National Bank of Canada P/E ratio: 12.1 (as of May 2024)
With a P/E ratio of 12.1, NA stock is deemed viable. The average P/E ratio ranges from 20 to 25 depending on the industry, so any value lower than that indicates a good stock that is not overvalued.
National Bank of Canada Dividend Payout Ratio: 42%
The DPR of National Bank of Canada currently stands at 42%, meaning that the bank pays out 42% of its earnings as dividends. This also means that the rest of the earnings are likely used to finance operations and growth strategies, which is good for investors and the bank’s sustainability. The industry average is around 35% to 55%. So, given that this is within the average range, investors can consider NA’s stock DPR as acceptable.