Stock Analysis: Bank Of Nova Scotia

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Bank of Nova Scotia (BNS) is a global financial services provider. The bank has five business segments: (1) Canadian banking, (2) international banking, (3) global wealth management, (4) global banking and markets, and (5) other.

It offers a range of advice, products, and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets.

The bank's international operations span numerous countries and are more concentrated in Central and South America.

The Bank of Nova Scotia was founded in 1832 and is headquartered in Halifax, Canada.

Three key data points gauge Bank of Nova Scotia or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.
 

BNS Price

Over the past year, BNS’s share price fell about 25.6% from $62.97 to $46.84 as of Tuesday’s market close.

If BNS’s stock trades in the range of $40.00 to $55.00 this next year, its recent $46.84 share price might rise to $51.50 by next year. Of course, BNS’s price could drop about the same $4.66 amount, or more.

My upside estimate of $4.66, however, is $0.86 under the median of target estimates from 15 analysts who track the stock for brokers.
 

BNS Dividend

BNS’s quarterly dividends have been paid since July 1989. BNS’s most recent Q dividend, paid July 27th to shareholders of record July 5th is $0.80.  So, BNS’s annual dividend payout is projected to be $3.21 and yield 6.84% per Tuesday’s closing price.
 

BNS Returns

Adding the $3.21 anticipated annual dividend to Bank Of Nova Scotia’s estimated $4.66 price upside reveals a $7.87 potential gross gain per share for the coming year.

At Tuesday’s $46.84 closing price, a little under $1000 would buy 21 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.48 per share.

Subtracting that maybe $0.48 brokerage cost from my estimated $7.87 gross gain per share makes a net gain amounting to $7.39 X 21 shares = $155.19 for about a 15.5% net gain.

This may be the time to pounce on Bank Of Nova Scotia shares. But beware, BNS is an international bank. Furthermore, the estimated $68.40 dividend from $1000 invested comes in at just under 1.5 times more than the recent single share price. The choice is yours.

Remember the true value of any stock is best realized by your personal ownership of shares.


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Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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