Is Laurentian Bank (TSX:LB) a yield trap right now?
June 2025With a dividend yield currently sitting at 6.73%, Laurentian Bank (TSX:LB) presents a rate significantly higher than its competitors, raising the question of whether this could be a yield trap.
While the dividend might seem attractive to income-focused investors, its underlying performance suggests otherwise.
Over the past year, Laurentian has seen a -5.53% return, while the S&P/TSX Composite index gained 17.65%, indicating a worrying divergence.
Its five-year performance is also starkly negative, at -18.46%, compared to the index’s 41.10%.
Investors should be cautious, as high yields could be masking broader financial challenges.
As you can see, while the LB stock has a impressive dividend streak, its dividend yield is quite out of line vs other financial peers.
| Company Name | Dividend Streak | Dividend Yield |
| Royal Bank of Canada | 30 | 3.40% |
| The Bank of Nova Scotia | 30 | 5.89% |
| Canadian Imperial Bank Of Commerce | 30 | 4.30% |
| Bank of Nova Scotia | 30 | 5.89% |
| Canadian Imperial Bank of Commerce | 30 | 4.30% |
| Bank of Montreal | 30 | 5.15% |
| Toronto Dominion Bank | 30 | 4.67% |
| Royal Bank of Canada | 30 | 3.40% |
| Laurentian Bank of Canada | 30 | 6.73% |
| Bank of Montreal | 30 | 5.15% |
Laurentian Bank (TSX:LB) Current Performance Overview
Laurentian Bank’s financial performance continues to underwhelm, with year-to-date returns of just 5.32%, far behind the S&P/TSX Composite index’s 13.49%.
Additionally, its longer-term performance is concerning, with three-year returns at -19.75%.
Recent Q3 earnings reflected these struggles, with management citing macroeconomic headwinds and a shrinking loan portfolio as key challenges.
While leadership remains optimistic about a potential turnaround fuelled by strategic divestitures and a focus on core strengths, the immediate outlook remains uncertain, making investors wary of the bank’s prospects in the short term.