Bank of Nova Scotia

I am reviewing this bank today as its annual statement for 2008 has been published. The Bank of Nova Scotia (TSX-BNS) is on Mike Higgs’ list at www.dividendgrowth.org/Report.htm, on the Dividend Achievers list at www.dividendachievers.com/, and on the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices). As I have said previously, I do not own this bank as I have Bank of Montreal, TD Bank, and Royal Bank. This bank has done much better than the Bank of Montreal I reviewed on Monday.

A bright spot is that the 5 and 10 year average increase in dividends is 18% and 17 % per year, respectively. The book value has been increasing over the last 5 and 10 years by 9.81% and 9.37% per year, respectively and this is good. Also, the growth in closing price for this stock over the last 5 and 10 years is 8.38% and 13.51% per year respectively. Dividend income is about 4% of total annual return.

Most of the other measurements are good, but not great. The revenues have been growing well over the last few years, except for 2008, with the 5 year average at 9.46% per year. The growth in Earnings per Share for the last 5 and 20 years is 5.4 % and 8.74% per years respectively. Neither is great, but they are not awful either. Earnings are depressed and they are below what was expected.

There are some Hold Ratings and Strong Buy Ratings on this stock, but mostly, the rating is a Buy. The current P/E is 10.02, which is below the 5 year average of 13.6, which points to the stock being currently at a good buy price. The stock price is close the Graham Price, a good buy indicator. Also, the Price/Book Value Ratio of 1.84 is almost at 80% of the 10 year average of 2.24. This is another buy indicator. The October 2008 report is unremarkable, and sometimes in volatile times, unremarkable is good.

The Bank of Nova Scotia is a bank. They offer personal and corporate banking and wealth management services in Canada and US, which includes looking after banking, financing, investing, credit card and insurance needs. They offer mortgages and mutual funds and they offer full service and on-line brokerage services. It is an international bank having banking in Canada and some 40 other countries around the world in the geographic regions of the Caribbean and Central America, Mexico, Latin America and Asia. Its web site is www.scotiabank.com. See my spreadsheet at www.spbrunner.com/stocks/bns.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.