As you enjoy the long weekend, it’s easy to forget that the day was dedicated to Queen Victoria. So let’s take a look at two modern companies that would make the queen of the late industrial age, and presider over Great Britain’s greatest expansion, proud.
Founded in 1670, Hudson’s Bay Company (TSX: HBC) has a long history here in Canada, and is one of the few companies that existed when Queen Victoria reigned. The company was originally titled the “The Governor and Company of Adventurers of England Trading Into Hudson’s Bay”. It was a fur trader, and the de-facto government of Rupert’s Land. Fast forward to 2014 and the company remains in operation, though it has gone through a few ownership and management changes along the way.
It has survived where other competitors such as Eatons and Woolco have fallen, and now has a front row seat to the upcoming fall of Sears Canada. This would once again give the company dominance in the high-end retail market in Canada. Its acquisition of Saks 5th Avenue gives the company its first foothold into the U.S. in centuries, and will also allow Saks products to flow north to Canada.
Hudson’s Bay is hoping for a quick turnaround with Saks as the purchase pushed the company into a year-end loss of $258 million. Revenues did hold strong, coming in at $5.2 billion up from $4 billion in fiscal 2012. The stock closed Friday at $17.62, right in the middle of its 52-week range of $15.53-$21.20.
Much has changed in the centuries that Hudson’s Bay has been in operation. It started out searching for fur to make funny looking hats for rich people, and today it continues to sell funny looking hats to rich people. I guess some things don’t change after all.
Bank of Nova Scotia
Now I know I could have taken the easy route of talking about the Royal Bank of Canada or the Canadian Imperial Bank of Commerce. But I wanted to focus on a company that was following in the steps of the Queen’s imperial expansions. So let’s take a look at Bank of Nova Scotia (TSX: BNS)(NYSE: BNS), another contemporary of Queen Victoria, being founded in 1832.
While most Canadian banks have gone through a season of growth outside of our borders, none has been as aggressive as Bank of Nova Scotia. Last year almost half of all the bank’s revenues came from outside of Canada, fueled by growth in Latin America, the Caribbean, Europe and especially China. Where once traders looked overseas for tea and silk, now bankers search for deposits and wealth management assets.
Another similarity with Bank of Nova Scotia and the old Empire is its ability to put its banner everywhere, including the NHL, CFL, Canadian Tire, and Cineplex Theaters. The bank was even able to defeat its Dutch foes (a little history joke), when it purchased ING Direct Canada and rechristened it Tangerine.
The stock just hit a 52-week high on Thursday trading at $67.92, and closed Friday at $67.03. Just shy of its $69.50 price target, Bank of Nova Scotia also offers an annual dividend of $2.56. While the bank has never been the top bank in the country its expansion into the lands of the old empire could change that very soon.
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