The Canadian financial sector is one many investors have gone to over the years for dividend income, for good reason. These banks have had historically high levels of cash flow growth which has materialized in dividend increases overtime. Many of the country's largest banks have never having cut their dividend (ever), even through the Great Depression.
This level of dividend stability and predictability has made the dividend payouts of these lenders essentially sacrosanct, turning these equity investments into quasi-fixed income like securities.
With so many reliant on the stable and growing income provided by banks, the discussion often turns to which Canadian bank is the best choice for yield in this current market. My pick for income investors has to be the Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) for a few reasons.
Most importantly, Scotiabank provides investors with the best yields for the risk one takes with this investment. Scotiabank has streamlined the company's international operations, divesting of some toxic assets an repairing the company's balance sheet in order to focus on areas of growth.
Investor outflows from Scotiabank related to the company's underperformance in its international portfolio has increased the company's dividend yield to an attractive level relative to its peers on a risk/reward basis.
Invest wisely, my friends.
