- Bank of Nova Scotia is Canada’s most international bank with a focus on the Pacific Alliance countries.
- In the past 10 years, the bank’s earnings-per-share growth versus its share count growth was pretty poor compared to its peers.
- The stock has underperformed its peers but has outperformed the market.
- Scotiabank’s dividend yield of 4.7% is safe, and you can expect stable dividend growth from the bank.
As the third-largest Canadian bank by market cap, Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) or Scotiabank is often viewed as a blue-chip dividend growth stock. However, it may not be as great an investment as you think.
First, here’s an overview of the bank.
Business Overview of Bank of Nova Scotia
Scotiabank is Canada’s most international bank, but it still generates about half of its earnings from Canada. Its Canadian Banking segment is secure and generated the highest return on equity (“ROE”) of 22.7% in fiscal 2018 compared to the ROE of 14.4% and 16%, respectively, for its International Banking segment and its Global Banking and Markets segment. The overall ROE was decent at 14.9%.