If you ever needed a reason to hold onto Canadian bank stocks through troubled times, this week’s upbeat quarterly financial results delivered in a big way.

But is now a good time to buy more? Maybe not.

Oh sure, there was plenty of good news here to feed a rally that has been cooking for five months.

Despite simmering concerns about the creaking Canadian housing market, weaker economic activity and an uncertain outlook for global trade, the Big Six banks have sailed through the turbulence.

The Big Six reported a combined $16.7-billion in net earnings for the three months ended July 31, up nearly 20 per cent from the same period last year, if you ignore Toronto-Dominion Bank’s TD-T US$3-billion regulatory fine last year over its flawed anti-money-laundering program.

Another reason to feel confident about bank performance: The sector’s adjusted earnings on a per-share basis – the stuff that can ignite rallies – beat analysts’ estimates by an average of 8.6 per cent, as capital markets activity remained healthy and lenders had fewer-than-expected bad loans to absorb.

Bank stocks, which had looked like a risky bet as recently as April when the stock market was caught in a tariff-induced downward spiral, are now rewarding investors who pushed aside the panic.

Anyone who focused on the banks’ long-term track record for making it through recessions, financial crises, a pandemic, soaring inflation and U.S. President Donald Trump’s erratic economic policies did well.

The stocks have risen more than 30 per cent, on average, since April, despite some volatility on Thursday.

In their financial results this week, and a mostly upbeat outlook from top executives, Canada’s six largest lenders made it clear that bank stocks remain solid investments.

“Despite persistent uncertainty in the macroeconomic and policy environment, we remain confident in the overall quality, the diversification and the resilience of our portfolios,” Graeme Hepworth, chief risk officer at Royal Bank of Canada RY-T, told analysts during a conference call.

RBC shares rallied 5.1 per cent on Tuesday, after it announced profit figures that topped analysts’ estimates, which is an unusually big move for Canada’s largest lender.

So why not celebrate the Big Six and hit the buy button?

Full disclosure: I own units of an exchange-traded fund that tracks all six big bank stocks equally. I also own a Canadian dividend fund that is packed with banks.

I have no intention of lightening my exposure to the sector even as it gains steam.

However, I’m not expecting the current rally to persist, given that bank stocks are looking pricey. Valuations are at the top end of their historical range after the stocks traded at bargain levels for much of the past five years.

RBC now trades at 13.8-times estimated earnings for next year, according to S&P Global Market Intelligence – near the top end of a 10-year range from a low of 10 to a high of 14.

Even TD, which was beaten up last year after U.S. regulators announced stiff penalties against the lender, has rebounded impressively this year.

Its price-to-earnings ratio is now 12.7, up from just 9.6 at the start of the year, even though TD is still dealing with regulatory fallout that could hamper its growth.

As share prices rise, dividend yields fall, providing another snapshot of rising valuations.

TD’s yield, while still a respectable 4 per cent, was a glimmering 5.7 per cent as recently as December, before the stock rebounded. RBC’s yield has fallen to just 3.1 per cent, down from about 4 per cent in April.

Picking individual banks, rather than betting on all the Big Six, might be a way to focus on cheaper, higher-yielding stocks with more potential.

But there’s a risk in getting it wrong, and individual performance over the past year suggests that favourites come and go.

Over the past month, RBC is the top-performing big bank stock. Over the past three months, it’s Bank of Nova Scotia BNS-T. Year-to-date, TD is on top, although its shares declined sharply on Thursday. Over the past 12 months, honours go to Bank of Montreal BMO-T.

And this week? National Bank of Canada NA-T, whose share price has outperformed the peer average by more than 17 percentage points over the past three years, showed what can happen when lofty expectations meet disappointment.

After its quarterly profit failed to match analysts’ estimates, the stock slumped 3.8 per cent on Wednesday and now looks like a dud for this earnings season.

Canadian bank stocks are great long-term investments that can be held through good times and bad. But the bad times make better buying opportunities.