Bank of Nova Scotia 2

I do not own this stock (TSX-BNS), but I have been following it for some time. This bank also only had dividends increases on hold for 2009 and 2010. They increased their dividends by 6.1% this year. This is one of the lowest increases for this bank that they have had for some time. The 5 and 10 year dividend growth is 6.45% and 12.7% per year, respectively.

As for all Canadian Banks, the insider trading report shows lots of insider selling. The gross insider selling is $28.9M and the net is $27.9M. Insider selling is by CEO, officers and directors. They seem mostly to be selling stock options. There is some insider buying by directors of just over $1M. There are 504 institutions that own some 65% of this stock. Over the past 3 months there has been buying and selling and they have increased their shares by a modest 1.3%.

I get a 5 year low median Price/Earnings Ratio of 11.4 and a high median P/E Ratios of 14.2. (Note that the 10 year median P/E ratios are virtually the same.) The current P/E Ratio of 10.78 is therefore a low one and that suggests a low stock price.

I get a Graham Price of 52.66. The current stock price of $50.97 is 3% lower. The 10 year median low difference between the Graham Price and Stock price is the stock price being the same. So the stock price being lower than the Graham Price suggests a low stock price also.

I get a 10 year median Price/Book Value Ratio of 2.40 and a current one of 1.96. The current one is 80% of the 10 year median and would suggest a low stock price also. The current dividend yield is 4.08% and the 5 year median dividend yield is 3.92%, some 4.2% lower. This also suggests a low stock price. (Note that the 10 year median high dividend yield at 3.71% is lower than the current yield also.)

When I look at analysts’ recommendations, I find them all. I find Strong Buy, Buy, Hold, Underperform and Sell recommendations. Most of the recommendations are either Buy or Hold. The consensus recommendation would be a Buy. With the Buy commendations come 12 months stock prices between $55 and $68, a rather big range. One Hold says that all Canadian Banks are fully valued.

I think that this is a good Canadian Bank. They also have exposure to the Caribbean and Central America which other Canadian Banks do not. The only reason I do not consider buying this stock is that I also have too much Canadian Bank stock.

The blogger addicted2dividend has blogged about this stock recently at The Loonie Bin.

This is a pretty dull report. All our banks are priced relatively low. I cannot imagine a completely recovery until the EU solves their problems. No one knows when this will occur.

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 here Bank of Nova Scotia. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.