BANK OF NOVA SCOTIA $60.94 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $72.9 billion; TSINetwork Rating: Above Average; Div. yield: 4.1%, www.scotiabank.com) is the third-largest of Canada’s five big banks, with assets of $743.8 billion.
In its fiscal 2013 fourth quarter, which ended October 31, 2013, the bank earned $1.30 a share, up 10.2% from $1.18 a year earlier.
Higher loan demand and an increase in deposits pushed up the Canadian banking division’s earnings by 23.3%. That includes ING Direct, which the bank bought for $3.1 billion in late 2012. This business offers a variety of no-fee banking services, mainly over the Internet. It has 1.8 million customers and $30 billion of deposits.
The international banking division’s earnings rose 4.7%, also on stronger loan demand, particularly in Latin America and Asia. The wealth management division’s earnings gained 8.2%, as rising stock prices increased the value of the assets this business manages.
The bank continues to see rising loan demand in Canada, Asia, Latin America and the Caribbean. That should keep boosting its earnings and letting it raise its dividend—it recently increased its quarterly payout by 3.3% and now yields 4.1%. The stock trades at just 11.2 times this year’s forecast earnings of $5.42 a share.
Bank of Nova Scotia is our #1 safety-conscious buy for 2014.
