If you’ve got $9,000 sitting in your account and you’re wondering how to make it work for you, Bank of Nova Scotia (TSX:BNS) might just be the perfect place to park it. As one of Canada’s Big Five banks, Scotiabank stock has been around since 1832, growing from its roots in Halifax to a global financial powerhouse. While the bank operates in over 25 countries, its strong presence in Canada makes it a staple for many investors looking for steady returns and, most importantly, consistent dividends.
Reliable payments
Dividends are what make Scotiabank particularly attractive for passive income seekers. Right now, the dividend stock trades around $72.88 per share, offering an annual dividend of $4.24 per share. This works out to a yield of about 5.8%. That’s a pretty solid return just for holding the stock, and it gets even better when you reinvest those dividends over time. Just take a look for yourself from a $9,000 investment! That’s money that just lands in your account four times a year without you having to do a thing.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| BNS | $72.80 | 123 | $4.24 | $521.52 | quarterly | $9,000 |
Scotiabank has been a reliable dividend stock for decades, and it’s one of the few companies that has kept its dividend steady even through economic downturns. The bank historically increased its payouts, making it a great choice for investors who want income that grows over time. Compared to other banks, Scotiabank’s yield is one of the more generous, especially considering its strong position in the Canadian banking sector.
The numbers
Earnings tell a mixed story, but nothing out of the ordinary for a major bank navigating today’s economic landscape. In its most recent fiscal year, Scotiabank pulled in $29.6 billion in revenue, a modest 1.3% increase year over year. However, it also faced a notable $379 million impairment charge related to its investment in China’s Bank of Xi’an, which weighed on profits. Despite this, the dividend stock remains a strong player, consistently generating billions in net income.
Looking ahead, analysts remain cautiously optimistic about Scotiabank. The consensus price target sits around $77.92, which suggests a potential upside of about 7.6% at writing. While that’s not a huge gain, when you pair it with the nearly 6% dividend yield, it makes for a compelling total return. The bank’s shift in focus towards core North American operations and cost-cutting measures could help it navigate current challenges while still delivering value to shareholders.
What to consider
Like any investment, there are risks. Scotiabank struggled with some of its international operations, which have been less profitable than anticipated. Its recent earnings also showed that higher operating expenses, particularly in technology and compensation, are cutting into profit margins. But that’s not entirely unique to Scotiabank. Banks across the board are dealing with rising costs, and in many ways, Scotiabank is well-positioned to handle these challenges thanks to its strong balance sheet and diversified business model.
Canadian banks, in general, are known for their stability, and Scotiabank is no exception. It’s a well-regulated institution with a long history of weathering economic storms. Even with interest rate uncertainties and a cooling real estate market, the dividend stock has shown resilience. Plus, for long-term investors, a dividend yield above 5% is tough to ignore.
Bottom line
For those looking for passive income, Scotiabank stands out as a top choice. With a $9,000 investment, you’re getting reliable quarterly payouts, the potential for future dividend hikes, and exposure to one of Canada’s strongest financial institutions. The dividends alone could help cover a bill, pay for a dinner out, or simply be reinvested to grow your wealth even further.
If you’re planning for long-term financial security, dividend stocks like Scotiabank are a great foundation. The combination of income and growth potential makes it an attractive pick, especially for investors who want their money to work for them without constant monitoring. So, if you’re sitting on some cash and want to start earning passive income, Scotiabank might just be the perfect fit.
