Bank of Nova Scotia (TSX: BNS) delivered solid gains last year and currently trades near a record high. Investors who missed the rebound are wondering if BNS stock is still attractive to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividends and total returns.
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Bank of Nova Scotia share price
Bank of Nova Scotia trades near $102 per share at the time of writing. The stock has been on an upward trend for the past nine months, rising from $64 at the bottom of the tariff rout that occurred in April last year.
Bank stocks have broadly performed well over the same timeframe, but investors have also started to warm up to Bank of Nova Scotia as it works through a turnaround program.
The company sold its assets in Colombia, Panama, and Costa Rica last year as part of its plan to shift the growth focus away from Latin America to concentrate more on the United States and Canada. In 2024, Bank of Nova Scotia purchased a 14.9% stake in KeyCorp, an American regional bank, for about US$17 per share. KeyCorp currently trades near US$21 per share. The deal gives Bank of Nova Scotia a good platform to expand its presence in the U.S. market.
Bank of Nova Scotia has also trimmed staff and consolidated branches in an effort to streamline operations and reduce expenses.
Earnings
The efforts are starting to deliver results. Bank of Nova Scotia reported adjusted net income of $2.56 billion in the fiscal Q4 2025 compared with $2.12 billion in the same period last year. Return on equity (ROE) rose to 12.5% from 10.6% in fiscal Q4 2024.
Full-year fiscal 2025 adjusted net income came in at $9.51 billion compared to $8.63 billion. ROE for the full year was 11.8%, compared to 11.3% in 2024. The bank finished fiscal 2025 with a common equity tier-one (CET1) ratio of 13.2%. This means Bank of Nova Scotia is sitting on ample capital to enable it to ride out market turbulence or even make additional strategic acquisitions.
Dividends and share buybacks
Bank of Nova Scotia raised the quarterly dividend by $0.04 to $1.10 per share last year. Investors who buy BNS stock at the current level can get a dividend yield of 4.3%.
The bank is also buying back up to 20 million shares under the current share-repurchase plan.
The bottom line
Near-term volatility in the share price should be expected. Banks have had a big run, and the broader market is due for a pullback.
That being said, Bank of Nova Scotia appears to be on the right track with its turnaround efforts, and investors get paid a good dividend yield to ride out any market swings. Management’s medium-term goal is to get ROE above 14%. As earnings and ROE rise, the market will feel comfortable giving the stock a higher multiple.
If you are looking for a bank stock to add to a buy-and-hold dividend portfolio, BNS deserves to be on your radar.
