When the market dips, too often investors focus on the drop in stock prices rather than the discount opportunity it presents. In fact, while the market is still volatile, it’s a perfect time to grab this stellar TSX stock.
The TSX stock for investors to consider right now is Bank of Nova Scotia (TSX:BNS).
Source: Getty Images
Meet Scotiabank: The big bank your portfolio needs now
Scotiabank isn’t the largest or the oldest of the big banks. It is, however, the most international of the big banks. That international segment is something that differentiates the bank from its peers, and for good reason.
The Canadian banking market is overwhelmingly covered by the big banks. This means that the banks generate a reliable revenue stream that leaves room for investment and income.
More importantly, that saturated domestic market means that the big banks need to turn to foreign markets to fuel that growth. And that’s where Scotiabank’s massive international segment comes into play.
Scotiabank’s international presence is focused on two distinct markets: Latin America and the United States. The high-growth markets of Latin America, specifically Mexico and Peru, have provided Scotiabank with stellar growth.
More recently, that growth focus has shifted more towards the U.S. market. This aligns the bank with its big bank peers while also lowering overall risk from operating in markets such as Colombia and Chile. Concurrently, this allows Scotiabank to refocus on other markets, such as the U.S., Canada, and Mexico.
The shift also pushes the bank more towards corporate and wealth management banking in those growth markets.
Earn some juicy income from this TSX stock now
One of the main reasons why investors flock to big bank stocks like Scotiabank is for the dividends. In the case of Scotiabank, that quarterly dividend currently carries an insane 6.15% yield.
This means that investors who can drop $7,000 into Scotiabank now will get one of the best long-term dividends on the market. You can’t retire on the more than $400 in dividends the initial investment will earn, but it can be reinvested.
Those reinvestments, coupled with Scotiabank’s storied history of providing annual upticks to that dividend. This means that the initial $7,000 could double in a decade (and that’s without doing a single thing).
That’s based on the assumption that annual dividend growth will be 3-4% (and it’s usually much higher). Another assumption I make is that all dividends are reinvested, making this a buy-and-forget transaction.
That fact alone makes Scotiabank one of, if not the best buy-and-forget TSX stock for investors to consider right now.
Why invest in Scotiabank now?
Apart from the juicy dividend on offer, another key reason is that this TSX stock trades at a decent discount.
As of the time of writing, Scotiabank trades down nearly 11% year to date. This makes it an excellent long-term pick for income and growth-seeking investors alike.
In my opinion, Scotiabank is a superb TSX stock that should be a core holding in any long-term, well-diversified portfolio.
Buy it, hold it, and watch your future income grow.
