KBC Group (OTCMKTS:KBCSY – Get Free Report) and Bank of Nova Scotia (NYSE:BNS – Get Free Report) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.
Analyst Recommendations
This is a breakdown of current recommendations for KBC Group and Bank of Nova Scotia, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| KBC Group | 1 | 4 | 1 | 0 | 2.00 |
| Bank of Nova Scotia | 0 | 3 | 2 | 0 | 2.40 |
Bank of Nova Scotia has a consensus price target of $117.00, suggesting a potential upside of 45.13%. Given Bank of Nova Scotia’s stronger consensus rating and higher probable upside, analysts plainly believe Bank of Nova Scotia is more favorable than KBC Group.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| KBC Group | $26.56 billion | 2.02 | $4.04 billion | $5.04 | 12.76 |
| Bank of Nova Scotia | $52.70 billion | 1.88 | $5.56 billion | $5.24 | 15.39 |
Bank of Nova Scotia has higher revenue and earnings than KBC Group. KBC Group is trading at a lower price-to-earnings ratio than Bank of Nova Scotia, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares KBC Group and Bank of Nova Scotia’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| KBC Group | 14.98% | 13.51% | 0.93% |
| Bank of Nova Scotia | 13.38% | 13.16% | 0.70% |
Volatility and Risk
KBC Group has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.
Institutional & Insider Ownership
49.1% of Bank of Nova Scotia shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Dividends
KBC Group pays an annual dividend of $3.19 per share and has a dividend yield of 5.0%. Bank of Nova Scotia pays an annual dividend of $3.16 per share and has a dividend yield of 3.9%. KBC Group pays out 63.3% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 60.3% 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 raised its dividend for 14 consecutive years.
Summary
Bank of Nova Scotia beats KBC Group on 11 of the 16 factors compared between the two stocks.
About KBC Group
KBC Group NV, together with its subsidiaries, provides integrated bank-insurance services primarily for retail, private banking, small and medium sized enterprises, and mid-cap clients. The company offers demand deposits and savings accounts; home and mortgage loans; consumer finance and SME funding services; credit, investment fund and asset management, and life and non-life insurance; and cash management, payments, trade finance, lease, money market, capital market products, and stockbroking services. It also provides digital and mobile banking services. The company was formerly known as KBC Bank and Insurance Holding Company NV and changed its name to KBC Group NV in March 2005. KBC Group NV was incorporated in 1935 and is headquartered in Brussels, Belgium.
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.
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