Bank of Nova Scotia (BNS-T)

Worst-performing Canadian bank over the last decade, and that's one of the reasons he likes it. New CEO has freedom to exit under-performing businesses, especially in Latin America. Proceeds are being reinvested in NA. Earnings poised to rise significantly next year as capital gets properly allocated. 

Not expecting outperformance. But yield is 6.11%, and with improvement in growth and other metrics should deliver at least a 10% annualized return for the next 5 years.

Nice run, now having a bit of a setback. But that's OK, that's how it goes with the banks. He doesn't mind buying at these levels.

In his opinion, the only quality banks in Canada are RY and NA. Own quality. New CEO has done an excellent job. Results were very good, but had to raise loan losses.

New strategy under new CEO made sense in theory, but devil is in the details. Non-controlling position in KeyCorp was a head scratcher. Sold Colombian business, but still invested. Show-me story. 

New CEO refocusing on domestic operations and on growing deposit base as a source of funding. Will take time, but doable. Attractive valuation, in lower range amongst peers. Nice dividend.

Better to not hold only 1 bank; also consider RY, which is her favourite.

Liked it below $65, but recently sold up in the mid-$70s. Looking to add back in, but it has to be sub-$70. Risk/reward here is merely neutral, so it's a hold.

Share have gone done, but actually rose in the second half of 2024. The new CEO is unknown, so he's TBD with the market. But so far, there's better performance in key metrics. It takes time to turn around a large company, like 2, 4 or even 10 years. But there's little competition among Canadian banks and you collect a nice dividend as you wait. He's happy to stay the course.

BNS is certainly a bank that investors like to hate on, and for generally good reason these past few years. After skipping in 2024, we would be quite surprised if it did not raise its dividend this year. Sentiment is low here, and the bank needs to get its act together. Investors would appreciate low, but consistent, dividend increases. It is cheap at 10X earnings with a high yield of 5.72% that is likely quite secure. We can see it as an accumulate. 
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More work to do, but probably out of the worst of it. Doing the right things. 1-2 years ahead of where TD's at today. Did pretty well last year, up about 23%. Going into the US for some growth with small stake in KEY. 

No. He'd stick with CNR. CNR is part of a true duopoly in Canada. Its infrastructure is extremely difficult to replicate. If there's a resurgence in transportation, this name will do well. Can outperform the overall market over the long term. It won't be a tremendous investment, but it will do better than BNS over the next 3-5 years.

Banks have had a good run, so best to be a bit cautious now. 

Sold, and shifted into other names. Some analysts have really warmed to it lately. Domestic presence has increased dramatically and strongly. Wants to see all the bank earnings, feels expectations are too high given what they can deliver on growth in the short term. Valuations are at higher end for all.

Paid a lot of $$ for its recent acquisition, and he wants to watch that play out. Canadian banks have a chequered history with US expansion, and he's not sure BNS will break that trend.

One of the largest holdings in his income growth fund. High regard for new CEO. Executing on goals. Probably biggest benefactor in the Canadian banking sector of lower interest rates. Nice yield.

Still likes it. New CEO seems to have made good moves in terms of cost control and tightening operations. Capital markets doing really well, credit looks more stable, earnings up substantially. Good execution, strategic direction coming together.

Downward trend since 2021 from $95 to $55. Seeing nice head-and-shoulders reversal, with the "head" in October 2023. Nice consolidation around the shoulders, breakout to where we are now at $78-79. Everything looks really good right now. Conservative, don't have to worry about too much.

Potential to reach $90, playing catchup to some of the others.

BNS continues to pay a solid dividend yield of 5.4%, and it is up 22% on a year-to-date basis, and 29% on a one-year basis. Its earnings outlook is improving, and most analyst estimates are trending higher recently. Analysts have been upping their price targets mostly on improving fundamentals under the CEO, Scott Thomson, who has revamped leadership and focused on profitability. It may see some consolidation after its recent run up, but we continue to like the name and feel that it trades at a reasonable valuation of 11.4X forward earnings.
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