Canada’s big banks are some of the best long-term investments in the market, and for good reason, too. The banks have provided investors with strong growth and handsome dividend hikes in the decade since the Great Recession, and they have used those gains to expand into other markets.
While most of the big banks expanded into the lucrative, white-hot U.S. market, Bank of Nova Scotia (TSX: BNS)(NYSE: BNS) saw an opportunity to expand heavily into several Latin American markets.
The nations of Columbia, Chile, Mexico, and Peru came together to form a trade bloc known as the Pacific Alliance. The stated goals of the bloc were to foster better trade relations between those member states, provide the means to share consular services abroad, and eliminate tariffs between those member states.
Bank of Nova Scotia capitalized on the Pacific Alliance by expanding into all four nations of the bloc, and in doing so became a familiar face across the bloc, which has led to significant double-digit gains during earnings season. The superb performance in the region even led Bank of Nova Scotia to pursue several acquisitions in the region; in doing so, Bank of Nova Scotia has emerged as one of the largest banks in Chile.
That’s not to say that the other segments of the bank have been performing weakly; in the most recent quarterly announcement, Bank of Nova Scotia reported net income of $2.17 billion, or $1.70 per diluted share, coming in at $110 million, or $0.08 per diluted share higher than the same period last year, while both the personal and commercial banking businesses saw strong 8% year-over-year gains.
Yet another reason why Bank of Nova Scotia remains a stellar opportunity at the moment comes in the form of the recent pullback across most of the financial sector. As at the time of writing, Bank of Nova Scotia trades at just over $70 with a P/E of 10.52. So far in 2019, the stock has seen a return of just 3.6%, which seems low considering that much of the market is still in the double-digit territory this year.
While Bank of Nova Scotia may appear as a great diversified pick in the financial sector, there is one more reason to buy it to take into account, which is the company’s mouth-watering dividend.
Bank of Nova Scotia currently offers a quarterly payout that provides a handsome 5.08% yield, which places the bank in a league of best-paying dividend investments on the market today.
In my opinion, Bank of Nova Scotia should be part of nearly any portfolio. Buy it, forget about it, and let that investment power your retirement portfolio to riches.
