If Canadians were hoping to enter September with some good news, it hasn’t ended up that way. Electronic vehicle (EV) sales recently plummeted nearly 30%. A Bank of Canada rate cut doesn’t even look in the bag. Yet one area is still doing well. Canadian banks.
That’s why today we’re going to check out not just any Canadian bank, but the Bank of Nova Scotia (TSX: BNS). This bank stock has been overlooked for years as the company that stretched into Latin America. Yet now, that investment is paying off, and for Canadian investors, it’s coming in the form of dividends.
Source: Getty Images
What happened
First, let’s look at that earnings success. Scotiabank stock recently reported huge growth in its third quarter for 2025. The bank stock reported net income rose to $2.5 billion from $1.9 billion compared to last year. Furthermore, earnings per share (EPS) reached $1.84 from $1.41 year-over-year, so profitability was also moving upwards.
What’s more, Scotiabank reported an incredible 56% increase in earnings from the quarter last year, thanks to lower credit losses and higher revenue. Global wealth management earnings rose 14% from higher revenues from mutual funds, brokerage, and net interest income.
More to come
Even better news? The company reported strong performance in global banking and markets, with a 29% increase in net income year-over-year. This was supported by robust capital markets activity, along with higher fees. And with adjusted earnings rising 6% year-over-year in international banking, it’s clear the movement down South is paying off.
Long term, the bank stock has been able to generate strong revenue growth while maintaining positive operating leverage. Through all this, the bank stock has maintained a strong balance sheet, with a Common Equity Tier 1 ratio (CET1) at 13.3%. With credit losses also down by $357 million from the quarter before, there’s even more opportunity for growth from this bank stock.
Value and income
Right now, Scotiabank trades at a low 11.2 times earnings, with potential value for growth-oriented investors. BNS stock also boasts a 3 times sales and 1.5 times book value. It also holds a strong dividend yield at 5%, so there’s consistent income and value ready to pick up today.
How much? If you were to put $7,000 towards Scotiabank right now, then you could immediately start earning annual dividend income of $347. And as the company continues to repurchase shares, Scotiabank will unlock even more shareholder value.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| BNS | $87.76 | 79 | $4.40 | $347.60 | Quarterly | $6,931.04 |
Bottom line
All together, Scotiabank demonstrated a strong earnings report. One that showed the bank isn’t only gearing up for growth this year, but long term. And a strong dividend yield is incredibly enticing for investors thinking about buying now and holding forever. With just a $7,000 investment, this bank stock could be one of the most overlooked dividend giants out there. And one that could fuel your retirement for decades to come with dividends immediately coming in.
