Critical Contrast: CaixaBank (OTCMKTS:CAIXY) & Bank of Nova Scotia (NYSE:BNS)

Bank of Nova Scotia (NYSE:BNS) and CaixaBank (OTCMKTS:CAIXY) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Dividends

Bank of Nova Scotia pays an annual dividend of $3.20 per share and has a dividend yield of 4.9%. CaixaBank pays an annual dividend of $0.13 per share and has a dividend yield of 3.8%. Bank of Nova Scotia pays out 86.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bank of Nova Scotia has raised its dividend for 14 consecutive years. Bank of Nova Scotia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Bank of Nova Scotia has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, CaixaBank has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500.

Insider & Institutional Ownership

49.1% of Bank of Nova Scotia shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Bank of Nova Scotia and CaixaBank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Nova Scotia	0	5	5	0	2.50
CaixaBank	1	3	1	0	2.00

Bank of Nova Scotia currently has a consensus target price of $86.00, suggesting a potential upside of 31.00%. Given Bank of Nova Scotia’s stronger consensus rating and higher possible upside, equities analysts plainly believe Bank of Nova Scotia is more favorable than CaixaBank.

Profitability

This table compares Bank of Nova Scotia and CaixaBank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Nova Scotia	9.74%	11.61%	0.62%
CaixaBank	N/A	N/A	N/A

Earnings & Valuation

This table compares Bank of Nova Scotia and CaixaBank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Nova Scotia	$55.90 billion	1.45	$5.70 billion	$3.72	17.65
CaixaBank	$24.18 billion	3.02	$6.26 billion	N/A	N/A

CaixaBank has lower revenue, but higher earnings than Bank of Nova Scotia.

Summary

Bank of Nova Scotia beats CaixaBank on 11 of the 14 factors compared between the two stocks.

About Bank of Nova Scotia

The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates through Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets segments. The company offers financial advice and solutions, and banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance to individuals; and retail automotive financing solutions. It also provides business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses. In addition, it provides wealth management advice and solutions, including online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services; and retail mutual funds, exchange traded funds, liquid alternatives, and institutional funds. The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada.

About CaixaBank

CaixaBank, S.A., together with its subsidiaries, provides various banking products and financial services in Spain and internationally. The company operates through Banking and Insurance, Equity Investments, and BPI segments. It also provides solutions related to security, protection, internationalization, and financing; traditional financial advice, independent advice, and broker services; asset management; liquidity management; capital markets, cash management, project finance, asset finance, and M&A services; and various financial services and solutions to public and private sector institutions, as well as distributes non-life and life risk insurance policies; and private banking services. In addition, the company is involved in the real estate business. It has branches and ATMs in Spain; and branches and ATMs in Portugal. CaixaBank, S.A. was founded in 1904 and is based in Valencia, Spain.