Scotiabank’s dividend yield has increased at a faster rate relative to its peers during the recent market turmoil we have seen, in part due to a stock price which has declined more rapidly than its peers. This stock price decline is largely related to a streamlining of the company’s international operations.
Once seen as a differentiator and reason for owning Scotiabank rather than its less-diversified peers, the company’s international operations in Latin and South America have required some strategic moves recently. In particular, issues in the Chilean market have been cause for concern for many investors this year.
A strategic refocus of Scotiabank’s international portfolio was likely overdue, and in that regard, I see these risk factors as being worth the reward which comes in the form of a higher dividend yield and better capital appreciation potential than its peers.