Bank of Nova Scotia (BNS.TO) Buy, Sell or Hold

Bank of Nova Scotia (BNS.TO)

129.41

-1.88 (1.43%)

as of Sep 30, 2026, 8:00:00 pm Market Open.

2150 watching

HOLD

A definite hold. They reported earnings and it was good news -- including an increase in the dividend. It trades at 10 times next year's earnings. Now is not the time to sell. He is not as worried about the potential sell off in the Canadian banking sector due to increased credit exposures -- he believes this is already factored into the current share prices. The Canadian housing sector is far less vulnerable than the US banking sector.

COMMENT

Today they announced they increased their dividend by 3 cents per quarter, paying a 5.25% yield which is high for a bank. Share buybacks are a better use of their cash, though. Nothing wrong with sitting on a bank stock and collecting the yield. BNS had a good quarter, but today's earning report was a low-quality beat. He prefers TD Bank for its US exposure.

HOLD

The banks are going sideways with Canadian mortgage worries, but they are soundly run. He disagrees that the banks should be shorted and the downside fears are invalid. That said, he doesn't hold many banks. It's okay to hold this long-term. Not for trading. Expect little stock movement.

PAST TOP PICK

(A Top Pick Sep 18/18, Down 8%) Well-run and pays a good dividend. They spent a lot buying asset management firms. Some investors aren't happy with BNS's spending or management. He sold it out of frustration. Latin America may be interesting...long term. Their capital markets division is struggling.

DON'T BUY

He has no direct exposure to Canadian banks because he thinks they are risky relative to potential market weakness. He prefers ZWB-T. He thinks BNS-T will under-perform because of their Latin American performance.

BUY

TD-T vs. RY-T. TD-T is bigger than RY-T in the US. BNS-T is a bit cheaper. He is warming up to the sector in general.

COMMENT

The Canadian banks are currently in sideways consolidation, but he likes their dividends. Be cautious if BNS falls below the current $69 level. If so, rotate into the stronger BMO.

DON'T BUY

He owns no Canadian banks because of the housing climate here and the general economy. BNS is the most internationally exposed, but investors are worried about emerging markets given trade war tensions, which could escalate. If you have a 5-10-year horizon, you won't lose much with BNS, but you won't gain much either. His choice of bank is TD-T for its large U.S. presence.

DON'T BUY

Stop? Down about 21% off the highs. He looks for the themes that are working. The first stock to double in a recovery is the one that doubles again first. When you are a leader you have an easier time running your company. He does not believe in buying the weakling in the group. He is not sure why BNS has been struggling, so he would be cautious.

PAST TOP PICK

(A Top Pick Jul 31/18, Down 4%) Still likes it and buying it for their clients. Has international operation that has had some challenges. New CEO has changed a lot of senior heads. Not 100% convinced the strategy is working, but wait and see, he hasn't been in the job for too long. Hopefully that will continue to work based on what we see so far. All banks globally are struggling. With low interests rates the returns aren't great. Banks are somewhat of utility at the moment.

TOP PICK

His favourite. Not firing on all cylinders right now. Domestic acquisitions, internationally restructuring. Negative sentiment around it. Price multiple is 10x. Building out scale in Canada, increasing efficiencies. Globally, tapping into emerging middle class. Yield is 4.92%. (Analysts’ price target is $77.36)

DON'T BUY

Some recent results a bit soft. Not growing in wealth management. Prefers TD and Royal. Those two are in the US and spending a lot on technology.

PAST TOP PICK

(A Top Pick Jul 03/18, Down 2%) The Canadian banks are good value right now. They trade between 9 & 12 times earnings. The yield is almost 5% and there could be room for dividend growth. He continues to add to his clients holdings.

PAST TOP PICK

(A Top Pick Jun 26/18, Down 2%) It's a little cheap vs. its peers and will catch up to the others over time. It needs to digest recent acquisitions, as their international operations come along. He's a little worried about Canadian mortgages, but a 5-7% return is respectible.

PAST TOP PICK

(A Top Pick Jul 06/18, Down 2%) Good stock. Into various jurisdictions in Central and South America where growth rate will continue to be good. Not an exciting place until we get beyond the current economic cycle. Yield is 5%.

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Bank of Nova Scotia (BNS.TO)