BNS.TO  Bank Of Nova Scotia

Exchange

TSX

Sector

Diversified Industries

Industry

Market Cap.

98.88B

Current Price

$81.84
-0.05 (-0.06%)

Book Price

$80.95
Fairly valued
Financial Institution

Company Metrics

  • P/E 14.19
  • P/S 4.13
  • P/B 1.88
  • EPS 5.77
  • Dividend 2.26 / 3.62%
  • Avg. Vol. 1.84M
  • Shares 1.21B
  • Market Cap. 98.88B

Company Description

The Bank of Nova Scotia, together with its subsidiaries, offers various personal, commercial, corporate, and investment banking services in Canada and internationally. It has four segments: Canadian Banking, International Banking, Global Wealth Management, and Scotia Capital. The Canadian Banking segment includes retail and small business banking, which provides mortgages, loans, credit cards, inv... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Royal Bank of Canada, Bank of Nova Scotia said to be most focused on fintech ...
Financial Post - Feb 17, 2017
Royal Bank of Canada and Bank of Nova Scotia are the most focused on embracing financial technology among Canada's largest lenders, according to a report from IDC.
Toronto-Dominion Bank Dividend Stock Analysis 2017 - Seeking Alpha
The Morning Download: Bank of Nova Scotia, Investing in Digital Overhaul ...
Wall Street Journal (blog) - Feb 7, 2017
Good morning. The adoption of artificial intelligence is in its early stages, and for some companies it can be difficult to extract value from an investment in the technology.
Bank of Nova Scotia says its new digital initiatives will cut costs and ... - Financial Post
Bank of Nova Scotia Unveils 'Digital Factories' to Boost Online and Mobile ... - Justmeans
Does Bank Of Nova Scotia Measure Up To Its Peers?
Seeking Alpha - Oct 17, 2016
Scotiabank is Canada's international bank and a leading financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific.
Bank of Nova Scotia Fails to Make the Cut
The Motley Fool Canada - Jan 27, 2017
Bloomberg honoured 52 financial services firms from around the globe January 23 for their commitment to building gender-equal workplaces.
Aperio Group LLC Cuts Stake in Bank of Nova Scotia (The) (BNS) - The Cerbat Gem
CMHC Does Bank of Nova Scotia's Dirty Work
The Motley Fool Canada - Jan 18, 2017
It highlighted their second-quarter results, examining the extent to which banks had reduced their mortgage portfolios over the previous 12-month period - Bank of Nova Scotia had decreased its Canadian mortgage portfolio by 37.8% year over year to ...
CSFB Boosts Bank of Nova Scotia (BNS) Price Target to C$80.00 - The Cerbat Gem
Dorchester Wealth Management Co Cuts Position in Bank of Nova Scotia (BNS) - Highland Mirror
Intact Investment Management Inc. Buys Bank of Nova Scotia, Algonquin Power ...
Nasdaq - Feb 14, 2017
For the details of INTACT INVESTMENT MANAGEMENT INC.'s stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=INTACT+INVESTMENT+MANAGEMENT+INC.
Why Investing in Bank of Nova Scotia Is Right for Your Portfolio
The Motley Fool Canada - Dec 28, 2016
When compared to each other, most of the big banks are fairly similar in many aspects, even down to when they announce quarterly updates.
Ex-Dividend Reminder: Washington Trust Bancorp, Host Hotels & Resorts and Bank ... - Forbes
Bank of Nova Scotia (BNS) to Issue Quarterly Dividend of C$0.74 on January 27th - Sports Perspectives
Bank of Nova Scotia: Time to Buy This Stock?
The Motley Fool Canada - Nov 30, 2016
Bank of Nova Scotia delivered better-than-expected results in the most recent quarter, earning net income of $2.01 billion, or $1.57 per share, compared $1.84 billion, or $1.45 per share, in the same period last year.
Is Bank of Nova Scotia (BNS) A Good Stock To Buy? - Insider Monkey (blog)
Scotiabank's target price raised on earnings beat, international growth - Financial Post
Bank of Nova Scotia Has Growth Potential Moving Forward
The Motley Fool Canada - Dec 29, 2016
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) has experienced a positive 2016, setting the stage for growth potential in 2017. The company has been making moves that will set it up for success, including raising its stake in Progressive Corp.
Bank of Nova Scotia Reports Solid 2016 Earnings
Yahoo Finance - Dec 5, 2016
Investors with an eye on the Canadian markets will know that it is earnings week for Canadian banks. On Nov. 29, the Bank of Nova Scotia reported earnings for the ninety-day and one-year period ending Oct. 31. We will cover that earnings release in detail.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for BNS.TO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate BNS.TO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

Poor Cash Return on Invested Capital over the past 5 years

BNS.TO has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

BNS.TO has only created $- of cash for every $100 invested.
Figures in CAD. Fiscal year ends in October
20122013201420152016
Free Cash Flow - - - - -
divided by
Invested Capital 668.04B 743.79B 805.67B 856.50B 896.27B
Cash ROIC - - - - -

Satisfactory Return on Equity over the past 5 years

BNS.TO has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

BNS.TO has generated $14.21 of Earnings for every $100 of Shareholders' Equity.
Figures in CAD. Fiscal year ends in October
20122013201420152016
Net Income 6.24B 6.42B 7.07B 7.01B 7.12B
divided by
Stockholders' Equity 39.64B 44.65B 47.90B 52.02B 56.25B
Return on Equity 15.75% 14.38% 14.76% 13.48% 12.65%

Poor Business Performance over the past 10 years

BNS.TO's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

BNS.TO has been losing money for the majority of the past 10 years.
Figures in CAD. Fiscal year ends in October
2007200820092010201120122013201420152016
Free Cash Flow - - - - - - - - - -

Consistent Reinvestment of Profits over the past 10 years

BNS.TO has consistently retained profits. This may put BNS.TO in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, BNS.TO can greatly improve their long-term economic picture.
Figures in CAD. Fiscal year ends in October
2007200820092010201120122013201420152016
Retained Earnings 17.46B 18.55B 19.92B 21.93B 24.66B 21.98B 25.32B 28.61B 31.32B 34.75B
Retained Earnings Growth - 6.23% 7.37% 10.12% 12.45% -10.88% 15.18% 13.01% 9.46% 10.97%

Highly Competitive Industry over the past 10 years

It's likely that BNS.TO is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely BNS.TO invests heavily in R&D and Sales, General & Administrative expenses.

Only $- of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in October
2007200820092010201120122013201420152016
Net Income 4.05B 3.14B 3.55B 4.24B 5.18B 6.24B 6.42B 7.07B 7.01B 7.12B
divided by
Revenue - - - - - - - - - -
Net Profit Margin - - - - - - - - - -

Weak Pricing Power over the past 10 years

BNS.TO is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that BNS.TO has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in October
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue - - - - - - - - - -
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

BNS.TO has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that BNS.TO may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

-% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in CAD. Fiscal year ends in October
2007200820092010201120122013201420152016
Capital Expenditure - - - - - - - - - -
divided by
Net Income 4.05B 3.14B 3.55B 4.24B 5.18B 6.24B 6.42B 7.07B 7.01B 7.12B
Capital Expenditure Ratio - - - - - - - - - -

Inconsistent Dividend History over the past 10 years

BNS.TO has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in CAD. Fiscal year ends in October
2007200820092010201120122013201420152016
Dividend Paid 1.77B 2.00B 2.18B 2.22B - 2.87B 3.22B 3.34B - 3.60B
divided by
Shares Outstanding 997.00M 993.00M 1.02B 1.03B 1.07B 1.16B 1.21B 1.22B 1.23B 1.23B
Dividend Paid Per Share 1.76 2.00 2.13 2.13 - 2.46 2.64 2.71 - 2.91
Price at Year End 42.56 28.31 45.67 54.99 50.83 57.43 66.22 66.39 57.70 74.76
Dividend Yield 4.14% 7.07% 4.65% 3.88% - 4.28% 3.99% 4.09% - 3.90%

History of Stock Buybacks over the past 10 years

BNS.TO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in CAD. Fiscal year ends in October
2007200820092010201120122013201420152016
Shares Outstanding 997.00M 993.00M 1.02B 1.03B 1.07B 1.16B 1.21B 1.22B 1.23B 1.23B
Stock Bought Back - 0.40% -2.26% -1.74% -3.72% -7.41% -4.05% -1.06% -0.81% 0.49%
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