The Bank of Nova Scotia
The Bank of Nova Scotia Fundamental Analysis
The Bank of Nova Scotia (BNS) shows weak financial fundamentals with a PE ratio of 16.84, profit margin of 10.64%, and ROE of 9.15%. The company generates $73.3B in annual revenue with weak year-over-year growth of -7.25%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 16.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze BNS's fundamental strength across five key dimensions:
Efficiency Score
WeakBNS struggles to generate sufficient returns from assets.
Valuation Score
ExcellentBNS trades at attractive valuation levels.
Growth Score
WeakBNS faces weak or negative growth trends.
Financial Health Score
WeakBNS carries high financial risk with limited liquidity.
Profitability Score
WeakBNS struggles to sustain strong margins.
Key Financial Metrics
Is BNS Expensive or Cheap?
P/E Ratio
BNS trades at 16.84 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, BNS's PEG of 1.49 indicates fair valuation.
Price to Book
The market values The Bank of Nova Scotia at 1.51 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -26.13 times EBITDA. This is generally considered low.
How Well Does BNS Make Money?
Net Profit Margin
For every $100 in sales, The Bank of Nova Scotia keeps $10.64 as profit after all expenses.
Operating Margin
Core operations generate 14.40 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.15 in profit for every $100 of shareholder equity.
ROA
The Bank of Nova Scotia generates $0.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Bank of Nova Scotia generates limited operating cash flow of $5.42B, signaling weaker underlying cash strength.
Free Cash Flow
The Bank of Nova Scotia produces free cash flow of $5.07B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.07 in free cash annually.
FCF Yield
BNS converts 3.85% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.84
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.49
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.51
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.80
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
5.80
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.12
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.005
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How BNS Stacks Against Its Sector Peers
| Metric | BNS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.84 | 18.86 | Better (Cheaper) |
| ROE | 9.15% | 847.00% | Weak |
| Net Margin | 10.64% | 4202.00% | Weak |
| Debt/Equity | 5.80 | 0.91 | Weak (High Leverage) |
| Current Ratio | 0.12 | 667.17 | Weak Liquidity |
| ROA | 0.53% | -21543.00% (disorted) | Weak |
BNS outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Bank of Nova Scotia's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-2.81%
Industry Style: Value, Dividend, Cyclical
DecliningEPS CAGR
-7.83%
Industry Style: Value, Dividend, Cyclical
DecliningFCF CAGR
229.74%
Industry Style: Value, Dividend, Cyclical
High Growth