Bank of Nova Scotia (NYSE:BNS – Get Free Report) and Mitsubishi UFJ Financial Group (NYSE:MUFG – Get Free Report) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.
Profitability
This table compares Bank of Nova Scotia and Mitsubishi UFJ Financial Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bank of Nova Scotia | 12.40% | 12.49% | 0.67% |
| Mitsubishi UFJ Financial Group | 13.87% | 9.58% | 0.50% |
Institutional and Insider Ownership
49.1% of Bank of Nova Scotia shares are held by institutional investors. Comparatively, 13.6% of Mitsubishi UFJ Financial Group shares are held by institutional investors. 0.0% of Mitsubishi UFJ Financial Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Volatility and Risk
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Bank of Nova Scotia and Mitsubishi UFJ Financial Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bank of Nova Scotia | 0 | 3 | 2 | 0 | 2.40 |
| Mitsubishi UFJ Financial Group | 0 | 1 | 1 | 1 | 3.00 |
Bank of Nova Scotia currently has a consensus target price of $106.00, indicating a potential upside of 37.09%. Given Bank of Nova Scotia’s higher probable upside, research analysts plainly believe Bank of Nova Scotia is more favorable than Mitsubishi UFJ Financial Group.
Dividends
Bank of Nova Scotia pays an annual dividend of $3.16 per share and has a dividend yield of 4.1%. Mitsubishi UFJ Financial Group pays an annual dividend of $0.38 per share and has a dividend yield of 2.1%. Bank of Nova Scotia pays out 65.7% of its earnings in the form of a dividend. Mitsubishi UFJ Financial Group pays out 33.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bank of Nova Scotia has increased its dividend for 14 consecutive years. Bank of Nova Scotia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Bank of Nova Scotia and Mitsubishi UFJ Financial Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bank of Nova Scotia | $52.70 billion | 1.80 | $5.56 billion | $4.81 | 16.07 |
| Mitsubishi UFJ Financial Group | $89.51 billion | 2.45 | $8.36 billion | $1.14 | 16.21 |
Mitsubishi UFJ Financial Group has higher revenue and earnings than Bank of Nova Scotia. Bank of Nova Scotia is trading at a lower price-to-earnings ratio than Mitsubishi UFJ Financial Group, indicating that it is currently the more affordable of the two stocks.
About Bank of Nova Scotia
The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates through Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets segments. The company offers financial advice and solutions, and banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance to individuals; and retail automotive financing solutions. It also provides business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses. In addition, it provides wealth management advice and solutions, including online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services; and retail mutual funds, exchange traded funds, liquid alternatives, and institutional funds. The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada.
About Mitsubishi UFJ Financial Group
Mitsubishi UFJ Financial Group, Inc. operates as the bank holding company, that engages in a range of financial businesses in Japan, the United States, Europe, Asia/Oceania, and internationally. It operates through seven segments: Digital Service, Retail & Commercial Banking, Japanese Corporate & Investment Banking, Global Commercial Banking, Asset Management & Investor Services, Global Corporate & Investment Banking, and Global Markets. The company offers commercial banking, trust banking, and securities products and services to retail, and small and medium-sized enterprise customers. It also provides mergers and acquisition, debt and equity issuance, financial advice, and real estate-related services; digital-based financial services; credit cards; and trust banking and securities products and services, as well as engages in the lending, fund settlement, and foreign exchange businesses. In addition, the company offers corporate banking services, such as project export credit agency finance, and financing through asset-backed commercial paper; investment and transaction banking services for corporations, financial institutions, sovereign and multinational organizations, and institutional investors; and asset management and investor services, including pension fund management and administration, pension structure advisory, beneficiary payment, and investment trust services for retail customers. Further, it provides loans, deposits, fund transfers, hedging, and investments services for retail, small and medium-sized enterprise, as well as corporate customers; financing for automotive and consumer goods; sells and trades in fixed income instruments, currencies, equities, and equities; offers investment products comprising mutual funds, structured bonds, and notes; originates and distributes of financial products; and provides insurance and treasury services. The company was founded in 1880 and is headquartered in Tokyo, Japan.
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