Bank of Nova Scotia (NYSE:BNS – Get Free Report) and ABN AMRO Bank (OTCMKTS:AAVMY – 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 risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.
Dividends
Bank of Nova Scotia pays an annual dividend of $3.21 per share and has a dividend yield of 3.4%. ABN AMRO Bank pays an annual dividend of $1.19 per share and has a dividend yield of 2.4%. Bank of Nova Scotia pays out 58.0% of its earnings in the form of a dividend. ABN AMRO Bank pays out 36.7% 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.
Profitability
This table compares Bank of Nova Scotia and ABN AMRO Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bank of Nova Scotia | 13.91% | 16.12% | 0.72% |
| ABN AMRO Bank | 14.22% | 9.12% | 0.56% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bank of Nova Scotia | 0 | 2 | 4 | 1 | 2.86 |
| ABN AMRO Bank | 0 | 1 | 6 | 1 | 3.00 |
Bank of Nova Scotia currently has a consensus target price of $117.00, suggesting a potential upside of 25.07%. Given Bank of Nova Scotia’s higher probable upside, research analysts clearly believe Bank of Nova Scotia is more favorable than ABN AMRO Bank.
Institutional and Insider Ownership
49.1% of Bank of Nova Scotia shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Bank of Nova Scotia and ABN AMRO Bank”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bank of Nova Scotia | $52.70 billion | 2.16 | $5.56 billion | $5.53 | 16.92 |
| ABN AMRO Bank | $19.04 billion | 2.16 | $2.30 billion | $3.24 | 15.48 |
Bank of Nova Scotia has higher revenue and earnings than ABN AMRO Bank. ABN AMRO Bank 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.
Summary
Bank of Nova Scotia beats ABN AMRO Bank on 10 of the 15 factors compared between 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 ABN AMRO Bank
ABN AMRO Bank N.V. provides various banking products and financial services to retail, private, and business clients in the Netherlands and internationally. It operates through three segments: Personal & Business Banking, Wealth Management, and Corporate Banking. The company provides savings and deposits products; investment and insurance products; and consumer, personal, car, and home improvement loan. It also issues, promotes, manages, and processes credit cards; trade finance, international payments, and treasury management; corporate finance and equity capital market; and revolving credit card facilities and pension schemes, as well as consumer credit and mortgages; and life and non-life insurance products. In addition, it offers asset-based solutions, including working capital solutions, equipment leases and loans, and vendor lease services; private banking and wealth-management-related services; and derivatives and equity clearing services. The company was incorporated in 2009 and is headquartered in Amsterdam, the Netherlands. ABN AMRO Bank N.V. operates as a subsidiary of Stichting Administratiekantoor Continuïteit Abn Amro Bank.
Receive News & Ratings for Bank of Nova Scotia Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Bank of Nova Scotia and related companies with MarketBeat.com's FREE daily email newsletter.
