When most American investors think of banks, names like Citigroup (VS 0.12%) and Bank of America (BAC 0.32%) probably come to mind first. This is understandable given their massive size and reach. But dividend investors looking to add bank stocks to their portfolios might want to consider a few institutions that are likely far less familiar to them: large Canadian corporations Bank of Montreal (BMO -1.56%) and Toronto-Dominion Bank (TD -0.56%).

High dividend yields

The Bank of Montreal, aka BMO, and the Toronto-Dominion Bank, or TD Bank, naturally pay their dividends in Canadian dollars. Thus, the actual payments that US investors will receive will fluctuate with exchange rates. And there are Canadian taxes that must be paid on those dividends, although at least some (and in some cases, all) of them may be recouped via US tax credits on April 15. That said, both of these institutions offer higher returns. than many of their American counterparts.

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For example, at the current share price, Bank of America is yielding 2.5%, while BMO and TD Bank are yielding around 4.2%. And while Citigroup’s yield is closer to that pair — around 4% in recent share price — it’s still not quite as generous. These four banks, on the other hand, have large businesses backed by dominant positions in their home markets.

Incredible commitment to shareholders

Another factor to consider here is that TD Bank has been paying dividends for a remarkable 164 consecutive years. BMO’s balance sheet is even better, outperforming all Canadian companies with a dividend-paying history spanning 193 years. Admittedly, the banks did not increase their payments every year over these periods. In fact, Canadian regulators stopped them from increasing their dividends during the Great Recession (more on that in a second). Still, the general trend lately has been higher.

Compare that to Citigroup and Bank of America, which both cut their dividends to a token $0.01 per share during the economic downturn from 2007 to 2009. While they were still paying dividends, those cuts amounted to an elimination . The penny-per-quarter payouts were essentially only intended to allow institutional investors who have dividend mandates for their portfolio holdings to remain shareholders.

Conservative by design

That Citigroup and Bank of America had to cut their dividends so drastically while BMO and TD Bank were able to maintain theirs during such difficult financial times speaks to the conservative nature of Canadian banks. While a degree of prudence is indeed built into the business model, Canadian banks are being forced by regulators to be even more prudent. At this point, top players like BMO and TD Bank essentially have entrenched positions in their home markets and are unlikely to be ousted by upstarts or competitors. This suggests that they may have limited growth opportunities. However, if you’re looking for a security-focused investment, you probably won’t mind.

Meanwhile, investors should note that BMO and TD Bank are focused on defense. This is because there is a real risk of a global recession, in part due to efforts to rein in runaway inflation. At the end of the second quarter, BMO’s Tier 1 capital ratio – a measure of a bank’s ability to withstand adversity – was the strongest of any North American bank. TD Bank ranked second. Simply put, if there is a severe recession coming, these two banks are better positioned to weather it than any of their North American counterparts.

Pursue the growth market in their south

However, don’t think that BMO and TD Bank are so conservative that they have no room for growth. In fact, both have worked to expand into the United States. Thanks to a more lenient regulatory environment in the US market, each of these Canadian banks was able to make acquisitions to fuel their growth. Their US operations are even smaller than their Canadian businesses – BMO’s US arm generates around 37% of total revenue while TD Bank’s US banking exposure is 29%. However, the fact that growth is still a clear priority and opportunity is a positive sign for conservative investors who want a long-term banking game.

Don’t get stuck in your home market

Investors everywhere tend to focus on investments from their home country. Don’t let that bias stop you from considering some of the best names in banking, including BMO and TD Bank. They might not be the first names that come to mind when you think of banking, but they have some incredibly attractive attributes. If you take the time to consider these two dedicated dividend payers, you might decide to find a place for them in your portfolio today and happily keep them for years to come.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Reuben Gregg Brewer holds positions at the Toronto-Dominion Bank. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.