Contrasting Avidia Bancorp (NYSE:AVBC) and Bank of Nova Scotia (NYSE:BNS)

Avidia Bancorp (NYSE:AVBC) and Bank of Nova Scotia (NYSE:BNS) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.

Insider & Institutional Ownership

49.1% of Bank of Nova Scotia shares are owned by institutional investors. 3.4% of Avidia Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Avidia Bancorp and Bank of Nova Scotia, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avidia Bancorp	1	0	0	1	2.50
Bank of Nova Scotia	0	2	4	1	2.86

Bank of Nova Scotia has a consensus price target of $117.00, indicating a potential upside of 25.11%. Given Bank of Nova Scotia’s stronger consensus rating and higher probable upside, analysts plainly believe Bank of Nova Scotia is more favorable than Avidia Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Avidia Bancorp	11.51%	4.62%	0.63%
Bank of Nova Scotia	13.91%	16.12%	0.72%

Earnings & Valuation

This table compares Avidia Bancorp and Bank of Nova Scotia”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avidia Bancorp	$111.19 million	3.91	-$3.29 million	$0.95	22.93
Bank of Nova Scotia	$39.39 billion	2.89	$5.56 billion	$5.53	16.91

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

Dividends

Avidia Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Bank of Nova Scotia pays an annual dividend of $3.29 per share and has a dividend yield of 3.5%. Avidia Bancorp pays out 25.3% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 59.5% 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 increased 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 Avidia Bancorp on 12 of the 16 factors compared between the two stocks.

About Avidia Bancorp

Avidia Bancorp Inc. is a chartered stock savings bank. It operates full-service banking offices principally in western Middlesex County and eastern Worcester County, in Massachusetts. Avidia Bancorp Inc. is based in HUDSON, Mass.

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.