Bank of Nova Scotia
🇨🇦 BNS.TO · Toronto · CA0641491075
Bank
CAD 97.64 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
13.8
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 97.64 ÷ 7.07 = 13.8
TTM period through: 2026-01-31
Forward P/E (estimated): 12.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 14.5
Yield (Fwd)
4.51%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 4.48%
Net Debt/EBITDA (TTM)
19.2x
Latest quarter: 86.4x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-01-31
Latest quarter (2026-01-31): 86.4x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
62.3%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 66.3%
Cash Flow Payout (TTM): 105.4%
FCF Coverage (TTM): 0.85x
ROE
10.3%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
Summary
Bank of Nova Scotia is a dominant member of the highly protected Canadian banking oligopoly, offering essential financial services and long-term business stability. The recently announced 6.5% dividend adjustment is a prudent, temporary measure to strengthen capital and fund strategic expansion (such as the KeyCorp stake), rather than a sign of structural distress. Trading at 97.64 CAD, comfortably below our fair value estimate of 108-115 CAD, this OPTIMAL-quadrant stock is worth considering for new positions as it offers an attractive combination of 4.48% yield and deeply ingrained competitive moats.
Sector Context
Bank of Nova Scotia provides personal, commercial, corporate, and investment banking services globally, operating as a core member of Canada's heavily regulated and protected banking oligopoly. In the banking sector, high Debt/Equity ratios (currently 2.92x) are standard business practice because customer deposits are classified as liabilities on the balance sheet; therefore, standard corporate metrics like Net Debt/EBITDA do not apply.
Temporary Opportunity Identified
Elevated operating costs, increased loan loss provisions due to macro volatility, and a small 6.5% strategic dividend trim have temporarily pressured sentiment without breaking the core business model.
📊 Strategy Analysis
- • Trading at a P/E of 13.82, the valuation sits squarely in the target 8-15x range for quality dividend payers, while the 4.48% TTM yield provides solid income.
- • Return on Equity (ROE) of 10.33% confirms the bank is maintaining target profitability standards despite recent macroeconomic headwinds.
- • The TTM payout ratio of 46.74% demonstrates the dividend remains fundamentally well-covered by earnings, leaving ample room even after the upcoming 6.5% strategic adjustment.
- • Operates as a core institution within the highly protected Canadian banking oligopoly, providing immense structural advantages, essential services, and reliable business visibility.
⚠ What to Watch
- • The board has proposed a 6.5% dividend reduction for 2026, breaking a 10-year growth streak, though the cut is relatively small and appears driven by strategic capital reallocation.
- • Five-year EPS CAGR shows a 4.5% decline, largely stemming from elevated operating costs and proactive credit loss provisioning during recent economic turbulence.
- • Escalating geopolitical tensions and inflation fears related to global energy markets could temporarily pressure loan growth and necessitate further credit loss provisions.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.