Comparing ABN AMRO Bank (OTCMKTS:AAVMY) & Bank of Nova Scotia (NYSE:BNS)

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for ABN AMRO Bank and Bank of Nova Scotia, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ABN AMRO Bank	0	1	6	1	3.00
Bank of Nova Scotia	0	2	4	1	2.86

Bank of Nova Scotia has a consensus target price of $117.00, indicating a potential upside of 25.07%. Given Bank of Nova Scotia’s higher probable upside, analysts plainly believe Bank of Nova Scotia is more favorable than ABN AMRO Bank.

Valuation & Earnings

This table compares ABN AMRO Bank and Bank of Nova Scotia”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ABN AMRO Bank	$19.04 billion	2.16	$2.30 billion	$3.24	15.48
Bank of Nova Scotia	$52.70 billion	2.16	$5.56 billion	$5.53	16.92

Bank of Nova Scotia has higher revenue and earnings than ABN AMRO Bank. ABN AMRO Bank is trading at a lower price-to-earnings ratio than Bank of Nova Scotia, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

49.1% of Bank of Nova Scotia shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ABN AMRO Bank	14.22%	9.12%	0.56%
Bank of Nova Scotia	13.91%	16.12%	0.72%

Dividends

ABN AMRO Bank pays an annual dividend of $1.19 per share and has a dividend yield of 2.4%. Bank of Nova Scotia pays an annual dividend of $3.21 per share and has a dividend yield of 3.4%. ABN AMRO Bank pays out 36.7% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 58.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 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.

Summary

Bank of Nova Scotia beats ABN AMRO Bank on 10 of the 15 factors compared between the two stocks.

About ABN AMRO Bank

ABN AMRO Bank N.V. provides various banking products and financial services to retail, private, and business clients in the Netherlands and internationally. It operates through three segments: Personal & Business Banking, Wealth Management, and Corporate Banking. The company provides savings and deposits products; investment and insurance products; and consumer, personal, car, and home improvement loan. It also issues, promotes, manages, and processes credit cards; trade finance, international payments, and treasury management; corporate finance and equity capital market; and revolving credit card facilities and pension schemes, as well as consumer credit and mortgages; and life and non-life insurance products. In addition, it offers asset-based solutions, including working capital solutions, equipment leases and loans, and vendor lease services; private banking and wealth-management-related services; and derivatives and equity clearing services. The company was incorporated in 2009 and is headquartered in Amsterdam, the Netherlands. ABN AMRO Bank N.V. operates as a subsidiary of Stichting Administratiekantoor Continuïteit Abn Amro Bank.

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.