Scotiabank (TSX:BNS)(NYSE:BNS) stock closed at $71.69 on June 24. Shares have climbed 6.6% in 2019 so far but are still down 2.5% from the prior year.
Scotia will be leaning on international growth more than ever as Canada struggles to meet growth targets due to an evolving energy sector and a dramatically cooled housing market.
This bank is often referred to as the international bank because of its large global footprint. It boasts significant investments in the Pacific Alliance countries, which are well worth monitoring for those with interests in Scotia right now.
The International Monetary Fund (IMF) expects the Pacific Alliance region to post 2% growth on average into the next decade. However, this number has been dragged down by the struggling Venezuelan economy.
Peru and Chile are expected to hover around 3-4% growth in the coming years. In the second quarter of 2019 Scotiabank announced an acquisition in Peru. It also boasts a footprint in Colombia and Chile.
Scotia reported net income of $700 million in its international banking segment in Q2 2019, which was up 4% from the prior year.
Scotia’s reliance on growth in this key region should not dissuade investors this summer, especially considering Canada’s economic trajectory. The stock boasts a P/E of 10.7, which is better-than-average among its peers.
Scotia recently bumped up its quarterly dividend to $0.87 per share which represents an attractive 4.8% yield. This stock is a worthy target for value and income investors as we move into July.
