Today’s pick is an NYSE-listed Canadian bank that boasts robust growth and strong diversification. The new recommendation is followed by a sell alert from Blue Chip Growth.
Bank of Nova Scotia (BNS)
from Personal Finance
Canada’s economy weathered the financial crisis in relatively strong shape. Consequently, this vast country has endured less of a downturn from which to recover than the U.S. and western Europe. ... The nation’s banks are consistently ranked among the world’s strongest and safest, most recently according to Bloomberg and Global Finance magazine.
Canada restricts domestic competition for its banks from foreign financial institutions, while also imposing stricter regulatory controls than does the U.S. Although this reduces banks’ room for growth, it also limits the potential consequences of financial excesses. ...
Our favorite in the group is Bank of Nova Scotia. Popularly known as Scotia Bank, it’s well diversified in both operations and geography, with four operating units: Canadian banking (33% of profits), international banking (25%), global wealth management (19%), and global banking and markets (23%).
Scotia is expanding both through organic growth and acquisitions: 30 since 2007. Total assets have increased 27% in two years, and the bank’s significant international diversification includes Latin America and Asia.
However, returns on common equity have remained solid, averaging 17.4% over the last five and a half years, with steady asset quality and strong cost controls.
Bank of Nova Scotia, a new addition to the PF Growth Portfolio, is a buy up to 62.
Philip Springer, Personal Finance, www.investingdaily.com, 800-832-2330, September 25, 2013