Tuesday, December 29, 2009

Bank of Nova Scotia

The last bank I am reviewing is the Bank of Nova Scotia (TSX-BNS). I follow this bank, but I have not invested in it. The reason I have not invested in this bank is that I already have enough bank investments with Bank of Montreal, TD Bank and Royal Bank. I think this is also a great bank.

When you look at total return for the last 5 years, this bank has done better than the Bank of Montreal, but not as well as the TD Bank and the Royal Bank. The total return for the last 5 years was 6.7% per year. The 10 year total return was better at 14.6% per year. For this stock, slightly more than 4% per year was the Dividend return portion of the Total Return.

As with other Canadian banks, the dividend growth for this stock was good. It was some 12% per year for the last 5 years and some 16% per year for the last 10 years. This bank has relatively good growth in revenues over the last 5 years, coming in at just over 8% per year. However, the revenue growth for the last 10 years was not very good, coming in at just under 4% per year. The growth in Book Value for this stock was also quite good, coming in at 10.7% per year and 9.5% per year for the last 5 and 10 years. As the all Canadian Banks, cash flow is not great, and this year this bank as a negative cash flow.

As with all banks, this one has a low Asset/Liability Ratio. This ratio is at 1.05, which is pretty standard for Canadian Banks. This bank had the highest Return on Equity for 2009 and for the last 5 year average. These figures were 13.6% and 17.5% respectively. The last thing to mention is the Accrual Ratio. This is rather high at 4.5% and also, the Cash Flow from Operations was negative. Neither is good.

This bank has a fairly good year in 2009. I will review what the analysts say about this stock tomorrow.

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. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.

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