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Is Bank of Nova Scotia (BNS) a High-Growth Dividend Stock?
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Bank of Nova Scotia in Focus
Headquartered in Toronto, Bank of Nova Scotia (BNS - Free Report) is a Finance stock that has seen a price change of -8.93% so far this year. The bank is currently shelling out a dividend of $0.62 per share, with a dividend yield of 4.25%. This compares to the Banks - Foreign industry's yield of 3.13% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $2.50 is up 8.7% from last year. Bank of Nova Scotia has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 1.01%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Bank of Nova Scotia's payout ratio is 48%, which means it paid out 48% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BNS for this fiscal year. The Zacks Consensus Estimate for 2018 is $5.42 per share, with earnings expected to increase 3.44% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BNS is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Is Bank of Nova Scotia (BNS) a High-Growth Dividend Stock?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Bank of Nova Scotia in Focus
Headquartered in Toronto, Bank of Nova Scotia (BNS - Free Report) is a Finance stock that has seen a price change of -8.93% so far this year. The bank is currently shelling out a dividend of $0.62 per share, with a dividend yield of 4.25%. This compares to the Banks - Foreign industry's yield of 3.13% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $2.50 is up 8.7% from last year. Bank of Nova Scotia has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 1.01%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Bank of Nova Scotia's payout ratio is 48%, which means it paid out 48% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BNS for this fiscal year. The Zacks Consensus Estimate for 2018 is $5.42 per share, with earnings expected to increase 3.44% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that BNS is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).