Fact based stock research
Bank of Nova Scotia (TSX:BNS)

CA0641491075

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

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Bank of Nova Scotia stock research in summary

scotiabank.com

ANALYSIS: With an Obermatt Combined Rank of 74 (better than 74% compared with investment alternatives), Bank of Nova Scotia (Diversified Banks, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Bank of Nova Scotia are a good value (attractively priced) with a consolidated Value Rank of 88 (better than 88% of alternatives), are safely financed (Safety Rank of 77, which means low debt burdens), but show below-average growth (Growth Rank of 19). ...read more

RECOMMENDATION: A Combined Rank of 74, is a buy recommendation based on Bank of Nova Scotia's financial characteristics. As the company Bank of Nova Scotia's key financial metrics exhibit good value (Obermatt Value Rank of 88) but low growth (Obermatt Growth Rank of 19) while being safely financed (Obermatt Safety Rank of 77), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 88% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	88
Growth Rank	19
Safety Rank	77
Combined Rank	74

Country	Canada
Industry	Diversified Banks
Index	Human Rights, Renewables Users, TSX Composite
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Bank of Nova Scotia

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	32	87	91	88
GROWTH
GROWTH	62	61	89	19
SAFETY
SAFETY	90	35	39	77
SENTIMENT
SENTIMENT	n/a	55	5	^new
360° VIEW
360° VIEW	n/a	65	63	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Bank of Nova Scotia is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	32	87	91	88
GROWTH
GROWTH	62	61	89	19
SAFETY
SAFETY	90	35	39	77
COMBINED
COMBINED	73	67	97	74

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Bank of Nova Scotia the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% compared with alternatives) for 2024, Bank of Nova Scotia shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Bank of Nova Scotia. Price-to-Sales is 85 which means that the stock price compared with what market professionals expect for future sales is lower than for 85% of comparable companies, indicating a good value for Bank of Nova Scotia's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 87% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 53. Compared with other companies in the same industry, dividend yields of Bank of Nova Scotia are expected to be higher than for 96% of all competitors (a Dividend Yield rank of 96). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, is a buy recommendation based on Bank of Nova Scotia's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Bank of Nova Scotia based on its detailed value metrics. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	21	76	81	85
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	36	87	81	87
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	24	27	61	53
DIVIDEND YIELD
DIVIDEND YIELD	76	100	96	96
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	32	87	91	88

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Bank of Nova Scotia; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Bank of Nova Scotia shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Bank of Nova Scotia. Sales Growth has a rank of 52, which means that, currently, professionals expect the company to grow more than 52% of its competitors. Profit Growth with a rank of 60 is also above average. But Capital Growth has only a rank of 13, and Stock Returns with 23 are also below-average. Stock returns for Bank of Nova Scotia have recently been below 77% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Bank of Nova Scotia. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with the Obermatt Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	43	76	80	52
PROFIT GROWTH
PROFIT GROWTH	13	20	82	60
CAPITAL GROWTH
CAPITAL GROWTH	n/a	79	45	13
STOCK RETURNS
STOCK RETURNS	64	51	63	23
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	62	61	89	19

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Bank of Nova Scotia.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives) for 2024, the company Bank of Nova Scotia has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Bank of Nova Scotia is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Bank of Nova Scotia. Refinancing is at 95, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 95% of its competitors. Liquidity is also good at 79, meaning the company generates more profit to service its debt than 79% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 2, which means the company has an above-average debt-to-equity ratio. It has more debt than 98% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 77 (better than 77% compared with alternatives), Bank of Nova Scotia has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Bank of Nova Scotia could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Bank of Nova Scotia and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	90	10	4	2
REFINANCING
REFINANCING	62	47	77	95
LIQUIDITY
LIQUIDITY	77	78	58	79
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	90	35	39	77

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Bank of Nova Scotia and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	80	5	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	25	4	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	8	21	^new
MARKET PULSE
MARKET PULSE	n/a	80	56	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	55	5	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Bank of Nova Scotia.
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