When one looks at the overall grouping of Canadian banks, one might notice that a significant divergence among the “Big Six” banks in Canada exists with respect to the valuations the market gives each respective lender.
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) finds itself in the lower tier of valuation multiples among its peers, making this bank an interesting value play from this perspective, but also an attractive dividend play as its lower stock price has made its dividend yield increasingly attractive.
Focusing on Scotiabank’s dividend, one ought to be enticed by the lender’s mid-single digit yield relative to other high yielding equities due to the considerable edge this stock provides in terms of cash flow stability and long-term dividend track record.
While some smaller banks may be at a greater risk of a dividend cut, most experts do believe that Canada’s largest banks are likely to remain in solid financial shape through this pandemic, barring an extraordinarily terrible scenario taking place.
Scotiabank is one of those core long-term portfolio holdings investors ought to consider picking up when shares drop below a certain threshold or when the company’s dividend yield increases to a level that becomes attractive.
In this current environment, Scotiabank’s current dividend yield I view as attractive and sustainable, making this stock a great income pick for investors with a relatively long-term investing time horizon.
Invest wisely, my friends.
