Should You Forget Capital One Financial? Here Are My Top 2 Bank Stocks to Buy Now

Core Viewpoint - Capital One Financial is viewed as a riskier investment due to its focus on higher-risk borrowers, while Canadian banks like Toronto-Dominion Bank and Bank of Nova Scotia are preferred for their stability and higher dividend yields [2][7][12] Group 1: Capital One Financial - Capital One primarily issues credit cards and loans to higher-risk borrowers, which can lead to profitability but also increased volatility during economic downturns [2][4] - The stock price of Capital One has increased by approximately 140% over the past decade, indicating past profitability [2] - During the coronavirus pandemic, Capital One reduced its dividend, which could be concerning for dividend investors seeking stability [4] Group 2: Canadian Banks - Toronto-Dominion Bank offers a dividend yield of 4.2%, while Bank of Nova Scotia provides a yield of 5.9%, significantly higher than Capital One's 1.2% [7] - Canadian banks operate under stricter regulations compared to U.S. banks, leading to a more conservative business approach and entrenched industry positions for major players like TD Bank and Scotiabank [8][9] - During the Great Recession (2007-2009), TD Bank and Scotiabank maintained their dividends, unlike many large U.S. banks [9] - TD Bank has continued to increase its dividend despite facing regulatory challenges in the U.S., while Scotiabank has adjusted its business model without cutting its dividend [10] - The preference for Canadian banks is based on their stability and reliability, making them attractive investments [12]