Financial Survey: SB Financial Group (NASDAQ:SBFG) versus Bank of Nova Scotia (NYSE:BNS)

SB Financial Group (NASDAQ:SBFG) and Bank of Nova Scotia (NYSE:BNS) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for SB Financial Group and Bank of Nova Scotia, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SB Financial Group	0	1	1	0	2.50
Bank of Nova Scotia	0	4	5	1	2.70

Bank of Nova Scotia has a consensus price target of $105.50, suggesting a potential upside of 16.89%. Given Bank of Nova Scotia’s stronger consensus rating and higher probable upside, analysts plainly believe Bank of Nova Scotia is more favorable than SB Financial Group.

Institutional and Insider Ownership

66.7% of SB Financial Group shares are held by institutional investors. Comparatively, 49.1% of Bank of Nova Scotia shares are held by institutional investors. 6.0% of SB Financial Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares SB Financial Group 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
SB Financial Group	$91.03 million	2.01	$13.97 million	$2.68	10.91
Bank of Nova Scotia	$52.70 billion	2.08	$5.56 billion	$5.53	16.32

Bank of Nova Scotia has higher revenue and earnings than SB Financial Group. SB Financial Group 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 SB Financial Group and Bank of Nova Scotia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SB Financial Group	17.67%	11.82%	1.07%
Bank of Nova Scotia	13.91%	16.12%	0.72%

Dividends

SB Financial Group pays an annual dividend of $0.64 per share and has a dividend yield of 2.2%. Bank of Nova Scotia pays an annual dividend of $3.20 per share and has a dividend yield of 3.5%. SB Financial Group pays out 23.9% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 57.9% 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. SB Financial Group has increased its dividend for 12 consecutive years and 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.

Risk and Volatility

SB Financial Group has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Summary

Bank of Nova Scotia beats SB Financial Group on 13 of the 18 factors compared between the two stocks.

About SB Financial Group

SB Financial Group, Inc. operates as the financial holding company for the State Bank and Trust Company that provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan. It offers checking, savings, money market accounts, as well as time certificates of deposit; and commercial, consumer, agricultural, and residential mortgage loans. The company also provides automatic teller machine, personal and corporate trust, commercial leasing, bank credit card, safe deposit box rental, internet banking, private client group, and other personalized banking products and services; and various trust and financial services comprising asset management services for individuals and corporate employee benefit plans, as well as brokerage services. In addition, it sells insurance products to retail and commercial customers. The company was formerly known as Rurban Financial Corp. and changed its name to SB Financial Group, Inc. in April 2013. SB Financial Group, Inc. was founded in 1902 and is based in Defiance, Ohio.

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.