National Bank Sees Room for Growth Despite 49% Stock Surge

The National Bank of Canada has seen its stock price rise nearly 49% in the last year, which may lead investors to wonder if they've missed their chance to get in on the action. However, this bank is showing signs that it still has room to run, thanks to a series of strategic acquisitions and a growing dividend.

The bank's acquisition of Canadian Western Bank (CWB) in February 2025 gave it a much larger national footprint, allowing it to expand its customer base and increase its profitability. In the second quarter of fiscal 2026, National Bank's adjusted earnings per share rose 13% year over year to $3.23, while its return on equity climbed to 16.8% from 15.6%. The bank also reported strong growth in its personal and commercial banking segment, as well as a significant increase in wealth-management revenue.

National Bank's management team is committed to making the combined business more profitable, rather than simply growing it through acquisitions. This approach has helped the bank maintain a disciplined approach to capital allocation, which has been a key factor in its long-term success.