Bank of Nova Scotia (BNS) versus Its Rivals Critical Review

Bank of Nova Scotia (NYSE:BNS) is one of 919 publicly-traded companies in the “Banks” industry, but how does it compare to its rivals? We will compare Bank of Nova Scotia to related businesses based on the strength of its institutional ownership, valuation, profitability, earnings, dividends, risk and analyst recommendations.

Profitability

This table compares Bank of Nova Scotia and its rivals’ 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%
Bank of Nova Scotia Competitors	15.66%	9.44%	0.93%

Dividends

Bank of Nova Scotia pays an annual dividend of $3.20 per share and has a dividend yield of 3.5%. Bank of Nova Scotia pays out 57.9% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 9.3% and pay out 28.9% of their earnings in the form of a dividend. Bank of Nova Scotia has increased its dividend for 14 consecutive years. Bank of Nova Scotia lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings and Valuation

This table compares Bank of Nova Scotia and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Bank of Nova Scotia	$52.70 billion	$5.56 billion	16.58
Bank of Nova Scotia Competitors	$9.95 billion	$2.42 billion	20.28

Bank of Nova Scotia has higher revenue and earnings than its rivals. Bank of Nova Scotia is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

Bank of Nova Scotia has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, Bank of Nova Scotia’s rivals have a beta of 0.61, indicating that their average share price is 39% less volatile than the S&P 500.

Insider & Institutional Ownership

49.1% of Bank of Nova Scotia shares are held by institutional investors. Comparatively, 48.0% of shares of all “Banks” companies are held by institutional investors. 9.7% of shares of all “Banks” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Bank of Nova Scotia and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Nova Scotia	0	4	5	1	2.70
Bank of Nova Scotia Competitors	7482	30219	27791	1473	2.35

Bank of Nova Scotia presently has a consensus price target of $105.50, suggesting a potential upside of 15.06%. As a group, “Banks” companies have a potential upside of 16.88%. Given Bank of Nova Scotia’s rivals higher probable upside, analysts clearly believe Bank of Nova Scotia has less favorable growth aspects than its rivals.

Summary

Bank of Nova Scotia beats its rivals on 8 of the 15 factors compared.

Bank of Nova Scotia Company Profile

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.