Critical Analysis: Great Southern Bancorp (NASDAQ:GSBC) versus Bank of Nova Scotia (NYSE:BNS)

Bank of Nova Scotia (NYSE:BNS) and Great Southern Bancorp (NASDAQ:GSBC) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for Bank of Nova Scotia and Great Southern Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Nova Scotia	0	2	4	1	2.86
Great Southern Bancorp	0	2	1	0	2.33

Bank of Nova Scotia presently has a consensus price target of $117.00, indicating a potential upside of 28.60%. Great Southern Bancorp has a consensus price target of $74.00, indicating a potential downside of 4.16%. Given Bank of Nova Scotia’s stronger consensus rating and higher possible upside, research analysts plainly believe Bank of Nova Scotia is more favorable than Great Southern Bancorp.

Earnings & Valuation

This table compares Bank of Nova Scotia and Great Southern Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Nova Scotia	$52.70 billion	2.10	$5.56 billion	$5.53	16.45
Great Southern Bancorp	$342.78 million	2.46	$70.97 million	$6.02	12.83

Bank of Nova Scotia has higher revenue and earnings than Great Southern Bancorp. Great Southern Bancorp is trading at a lower price-to-earnings ratio than Bank of Nova Scotia, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bank of Nova Scotia and Great Southern Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Nova Scotia	13.91%	16.12%	0.72%
Great Southern Bancorp	20.72%	10.83%	1.22%

Volatility & Risk

Bank of Nova Scotia has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Great Southern Bancorp has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.

Institutional and Insider Ownership

49.1% of Bank of Nova Scotia shares are owned by institutional investors. Comparatively, 41.7% of Great Southern Bancorp shares are owned by institutional investors. 29.7% of Great Southern Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Bank of Nova Scotia pays an annual dividend of $3.21 per share and has a dividend yield of 3.5%. Great Southern Bancorp pays an annual dividend of $1.72 per share and has a dividend yield of 2.2%. Bank of Nova Scotia pays out 58.0% of its earnings in the form of a dividend. Great Southern Bancorp pays out 28.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bank of Nova Scotia has raised its dividend for 14 consecutive years. Bank of Nova Scotia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Bank of Nova Scotia beats Great Southern Bancorp on 12 of the 18 factors compared between the two stocks.

About Bank of Nova Scotia

The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates through Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets segments. The company offers financial advice and solutions, and banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance to individuals; and retail automotive financing solutions. It also provides business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses. In addition, it provides wealth management advice and solutions, including online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services; and retail mutual funds, exchange traded funds, liquid alternatives, and institutional funds. The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada.

About Great Southern Bancorp

Great Southern Bancorp, Inc. operates as a bank holding company for Great Southern Bank that provides a range of financial services in the United States. Its deposit products include regular savings accounts, checking accounts, money market accounts, fixed interest rate certificates with varying maturities, certificates of deposit, brokered certificates, and individual retirement accounts. The company's loan portfolio comprises residential and commercial real estate loans, commercial business loans, construction loans, home improvement loans, and unsecured consumer loans, as well as secured consumer loans, such as automobile loans, boat loans, home equity loans, and loans secured by savings deposits. It also provides insurance and merchant banking services. The company was founded in 1923 and is headquartered in Springfield, Missouri.