Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), the third-largest bank in Canada in terms of total assets, has watched its stock widely underperform in the overall market in 2015, falling over 2.5% as the TSX Composite Index has gained over 5%, but it could be one of the top performing stocks from this point forward. Let’s take a look at three of the primary reasons why this could happen and why you should consider establishing a long-term position today.

1. A growing asset base driving earnings and revenues higher

Bank of Nova Scotia released solid first-quarter earnings results on March 3, but its stock has responded by falling over 2% in the weeks since. Here’s a summary of 12 of the most important statistics from the report compared to the same quarter a year ago:

  1. Net income increased 1% to $1.73 billion
  2. Earnings per share increased 1.5% to $1.36
  3. Revenues increased 4% to $5.96 billion
  4. Net interest income increased 5.5% to $3.17 billion
  5. Non-interest income increased 2.4% to $2.78 billion
  6. Core banking margin expanded six basis points to 2.41%
  7. Total assets increased 8.8% to $851.9 billion
  8. Total deposits increased 8.3% to $584.6 billion
  9. Total customer loans and acceptances increased 6% to $451.8 billion
  10. Total assets under management increased 13.4% to $173.8 billion
  11. Total common shareholders’ equity increased 10.6% to $46.9 billion
  12. Book value per share increased 11.1% to $38.75

2. The stock trades at inexpensive current and forward valuations

At today’s levels, Bank of Nova Scotia’s stock trades at just 10.9 times fiscal 2015’s estimated earnings per share of $5.89 and only 10.7 times fiscal 2016’s estimated earnings per share of $6.04, both of which are inexpensive compared to its five-year price-to-earnings multiple of 12.3.

In addition, the company’s stock trades at a mere 1.66 times its book value per share of $38.75, which is very inexpensive compared to its market-to-book value of 1.90 at the conclusion of fiscal 2014.

I think Bank of Nova Scotia’s stock could consistently command a fair multiple of at least 12, which would place its shares upwards of $70.50 by the conclusion of fiscal 2015 and around $72.50 by the conclusion of fiscal 2016, representing upside of approximately 6.5% and 12.6%, respectively, from current levels.

3. A 4.2% dividend yield

Bank of Nova Scotia pays a quarterly dividend of $0.68 per share, or $2.72 per share annually, which gives its stock a bountiful 4.2% yield at current levels. The company has also raised its annual dividend for five consecutive years, showing that it is strongly dedicated to maximizing shareholder returns, and I think this streak could continue for the next several years.

Should you invest in Bank of Nova Scotia today?

Bank of Nova Scotia represents a great long-term investment opportunity today because it has a growing asset base that has continued to drive its earnings and revenues higher, because its stock trades at inexpensive valuations, and because it has a very high 4.2% dividend yield. Foolish investors should take a closer look and strongly consider beginning to scale in to long-term positions today.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.