Monday, January 20, 2014

Bank of Nova Scotia

On my other blog I am today writing about 2000, 2008 and Recovery ...continue...

I do not own this stock of Bank of Nova Scotia (TSX-BNS, NYSE-BNS). This is one of the big banks of Canada. All our big banks are dividend growth companies.

This bank has also done quite well comparatively with dividend increases. They only stopped dividend increases for one year which was in 2010. However, dividend increases are down considerably from what they were prior to 2008. Dividend growth to 2008 over past 5 and 10 years was at 18% and 15.9% per year. The dividend growth over past 5 and 10 years to October 2013 was at 4.5% and 11% per year.

For 2013 the dividends grow 9.13% over the dividends for 2012. The latest increase was for 3.3% for 2014, however, this bank tends to raise the dividends more than once per year. The 5 year median Dividend Payout Ratio is 46% for earnings and 45% for cash flow. The comparable values for 2013 were 46% for earnings and 37% for cash flow. So this is good.

Shareholders have done well recently on this stock with the total return over the past 5 and 10 years at 19.67% and 11.20% per year. The dividend portion of this return is 4.87% and 3.92% per year. The capital gain portion of this return is 14.80% and 7.28% per year.

The outstanding shares have increased by 4% and 1.8% per year over the past 5 and 10 years. Shares have increased due to Stock Options, DRIP and Share Issues. Shares have decreased due to Buy Backs. Growth in revenue, earnings and cash flow has been good to very good.

Revenue per Share has grown at 9.3% and 6.8% per year over the past 5 and 10 years. The Revenue per Share growth using the 5 year running averages is somewhat lower for the last 5 years, with 5 and 10 year growth at 6.5% and 6% per year, respectively.

The Earnings per Share Growth is at 11% and 8.2% per year over the past 5 and 10 years. The EPS growth using the 5 year running averages is 6% and 9% per year over the past 5 and 10 years.

Cash Flow per Share growth is at 9.6% and 7.9% per year over the past 5 and 10 years. The CFPS growth is at 11.4% and 6.4% per year over the past 5 and 10 years using the 5 year running averages.

For this stock, the Return on Equity has been mostly above 10% and the ROE for 2013 was 14.4% with a 5 year median of 14.4%. The ROE on comprehensive income is a bit better coming in at 15.6% for 2013.

The Liquidity Ratio is good at 1.67, but most analysts skip this ratio as it is not as important as the Debt Ratio. The Debt Ratio is 1.07 for 2013 and this is in line with other banks. The Leverage and Debt/Equity Ratios for 2013 are at 15.98 and 14.98 and are also lower than the 10 year median values as with other banks. The 10 year median values for these ratios are at 18.92 and 17.92. These values are rather normal for financials.

This bank has been doing well lately. See my spreadsheet at bns.htm.

This is the first of two parts. The second part will be posted on Tuesday, January 21, 2014 and will be available here. On Tuesday, I will look at the current price and see whether or not it is a reasonable one.

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 Scotia Bank.

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 or StockTwits.

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