Laurentian Banks (TSX:LB) ex-dividend date is coming up. Is its 6.73% dividend yield a safe buy?

Is Laurentian Bank (TSX:LB) a yield trap right now?

With 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.

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.