Should You Buy Bank of Nova Scotia?

Bank of Nova Scotia’s (TSX:BNS)(NYSE:BNS) shares have fallen following the release of its Q4 earnings. Should you consider buying?

| More on:
The Motley Fool

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Bank of Nova Scotia (TSX: BNS)(NYSE: BNS), also known as Scotiabank, is the third largest bank in Canada by assets and it released fourth-quarter earnings on the morning of December 5, with the results coming in mixed compared to analysts’ expectations. The company’s stock has responded to the release by falling nearly 2% in the trading session, so let’s take a closer look at the results to determine if we should use this weakness as an opportunity to initiate a long-term positions.

Breaking down the quarterly results

Here’s a chart of Bank of Nova Scotia’s fourth-quarter earnings per share and revenue results compared to what analysts had expected and its results in the year ago period.

Metric Reported Expected Year-Ago
Earnings Per Share $1.32 $1.40 $1.29
Revenue $5.85 billion $5.81 billion $5.48 billion

Source: Financial Times

Bank of Nova Scotia’s adjusted earnings per share increased 2.3% and its adjusted revenue increased 6.8% compared to the fourth-quarter of fiscal 2013. These quality results were driven by adjusted net income increasing 1.6% to $1.70 billion and revenue growth in all four of the company’s business segments, including 6% growth in its Canada Banking segment, 7% growth in its International Banking segment, 10.4% growth in its Global Wealth & Insurance segment, and 6% growth in its Global Banking & Markets segment.

Here’s a breakdown of six other important statistics and updates from the report:

  • Total assets increased 8.3% to $805.67 billion compared to $743.64 billion in the year-ago period
  • Total loans increased 5.5% to $424.31 billion compared to $402.22 billion in the year-ago period
  • Total deposits increased 7% to $554.02 billion compared to $517.89 billion in the year-ago period
  • Assets under management increased 13.3% to $164.82 billion compared to $145.47 billion in the year-ago period
  • Return on equity of 14.4% compared to 15.8% in the year ago period
  • Book value per share of $36.96

Should you buy Bank of Nova Scotia today?

Bank of Nova Scotia is the third largest bank in Canada and the ninth largest bank in North America, and the growing demand for its services led it to a solid fourth-quarter performance. However, the company’s results came in mixed compared to the expectations of analysts, so its stock has responded by falling nearly 2%.

I think the decline in Bank of Nova Scotia’s stock represents one of the best long-term opportunities in the market today, as it now trades at just 1.8 times its book value and less than 11.3 times fiscal 2015’s earnings estimates, and it has the added benefit of a 4% dividend yield.

Should you invest $1,000 in Ces Energy Solutions right now?

Before you buy stock in Ces Energy Solutions, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Ces Energy Solutions wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any stocks mentioned.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Bank Stocks

A worker drinks out of a mug in an office.
Bank Stocks

Royal Bank of Canada: Buy, Sell, or Hold in 2025?

Royal Bank is down 6% in 2025. Is it time to buy the dip?

Read more »

chart reflected in eyeglass lenses
Stocks for Beginners

Seize the Dip: Investment Opportunities Await This April

If you're looking for one and only one opportunity during a market dip, buy this top stock.

Read more »

hand stacks coins
Bank Stocks

Here’s How Many Shares of IGM Financial You Should Own to Get $1,000 in Yearly Dividends

Besides its attractive dividend income, IGM Financial’s strong long-term growth fundamentals could help its stock outperform the broader market in…

Read more »

A person looks at data on a screen
Bank Stocks

Where Will Bank of Montreal Stock Be in 5 Years?

These factors give Bank of Montreal (TSX:BMO) stock the potential to outperform the broader market in the next five years.

Read more »

calculate and analyze stock
Bank Stocks

Where Will TD Stock Be in 3 Years?

Here are some key reasons why I expect TD stock to reward patient investors handsomely over the next three years.

Read more »

Pile of Canadian dollar bills in various denominations
Bank Stocks

1 Dividend Stock Down 10.2% to Buy Now for Lifetime Income

A high-yield stock with a nearly 200-year dividend track record is a screaming buy right now.

Read more »

calculate and analyze stock
Bank Stocks

Why Smart Investors Own Canadian Financial Stocks

Top Canadian stocks like these could help smart investors get strong returns on their investments in the long run.

Read more »

customer uses bank ATM
Tech Stocks

2 Canadian Bank Stocks to Shield Against Market Downturns

Anchor your portfolio with dividends and stability built to outlast trade war turbulence with Royal Bank of Canada (RBC) and…

Read more »