Head-To-Head Review: Bank of Nova Scotia (BNS) versus Its Rivals

Bank of Nova Scotia (NYSE:BNS) is one of 920 public companies in the “Banks” industry, but how does it compare to its competitors? We will compare Bank of Nova Scotia to related companies based on the strength of its institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Profitability

This table compares Bank of Nova Scotia and its competitors’ 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	15.38%	9.45%	0.93%

Insider and Institutional Ownership

49.1% of Bank of Nova Scotia shares are held by institutional investors. Comparatively, 47.9% of shares of all “Banks” companies are held by institutional investors. 9.8% of shares of all “Banks” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Bank of Nova Scotia pays an annual dividend of $3.20 per share and has a dividend yield of 3.4%. 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 9.5% 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 competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Bank of Nova Scotia and its competitors, as provided by MarketBeat.

	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	7455	30155	27701	1450	2.35

Bank of Nova Scotia presently has a consensus price target of $105.50, indicating a potential upside of 12.49%. As a group, “Banks” companies have a potential upside of 17.44%. Given Bank of Nova Scotia’s competitors higher possible upside, analysts plainly believe Bank of Nova Scotia has less favorable growth aspects than its competitors.

Earnings & Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Bank of Nova Scotia	$52.70 billion	$5.56 billion	16.96
Bank of Nova Scotia Competitors	$50.45 billion	$2.41 billion	18.89

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

Risk and Volatility

Bank of Nova Scotia has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Bank of Nova Scotia’s competitors have a beta of 0.60, suggesting that their average share price is 40% less volatile than the S&P 500.

Summary

Bank of Nova Scotia beats its competitors 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.