8 Best Diversified Bank Stocks to Invest in Right Now

In this article, we will take a look at the 8 Best Diversified Bank Stocks to Invest in Right Now.

Given their consistent profitability and long-term dividends, banks are considered “certainty assets” in the context of slow global development and mounting volatility, which has caused their value to be reviewed in recent months.

Furthermore, major countries across the globe have been on a rate-hiking cycle since 2022, which has resulted in novel company structures and forms of shareholder rewards. Market analysts have a lot to say about the recent surge in bank stocks. For example, CNBC’s Fast Money panelists recently noted that prominent financial institutions such as Goldman Sachs had just reached all-time highs due to strong earnings and increased market confidence.

Similarly, M&A activity seems to be strong this year, with 72 U.S. banking M&A deals totaling $10.39 billion being disclosed in the first half of 2025. In addition, the number of deals in 2025 is projected to reach its highest level in more than five years.

On the other hand, the banking industry faces immense pressure to compete, especially for smaller and mid-sized banks. To draw and keep clients in a variety of geographic areas, larger national banks make use of their wide branch networks, considerable marketing expenditures, and wider range of products. The emergence of fintechs is another cause for competition. Since they aren’t limited by conventional technology, fintech companies are able to create incredibly flexible and user-friendly digital solutions for particular financial requirements, making it difficult for smaller banks to compete.

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Our Methodology

For this list, we sifted through financial media reports to determine diversified bank stocks that analysts and investors are bullish on. We then selected the stocks that were the most widely held by hedge funds using Insider Monkey’s database of almost 1000 hedge funds, as of Q2 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

8. Bank of Montreal (NYSE:BMO)

Number of Hedge Fund Holders: 17

Bank of Montreal (NYSE:BMO) ranks among the best diversified bank stocks to invest in right now. On August 27, BofA Securities reaffirmed its rating at Neutral for Bank of Montreal (NYSE:BMO) but increased its price target from $116 to $128. The analyst report states that the bank’s Common Equity Tier 1 (CET1) ratio, which is higher than its operating aim of 12.5% and the regulatory minimum of 11.5%, stayed unchanged at 13.5%.

During the quarter, Bank of Montreal (NYSE:BMO) repurchased 6 million shares, accounting for approximately 1% of outstanding shares. Moreover, the bank has paid dividends for 53 years in a row, solidifying its reputation for financial stability.

BofA Securities anticipates that the new Normal Course Issuer Bid (NCIB) of 30 million shares announced by management would be finished by the end of fiscal year 2026.

Bank of Montreal (NYSE:BMO) is a Canadian bank that provides numerous financial services to people, corporations, and institutions. It offers products and services in personal banking, commercial banking, wealth management, and investment banking.