Reviewing Banco Santander Brasil (NYSE:BSBR) & Bank of Nova Scotia (NYSE:BNS)

Banco Santander Brasil (NYSE:BSBR) and Bank of Nova Scotia (NYSE:BNS) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Banco Santander Brasil and Bank of Nova Scotia, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander Brasil	1	1	1	0	2.00
Bank of Nova Scotia	0	3	2	0	2.40

Bank of Nova Scotia has a consensus target price of $106.00, indicating a potential upside of 51.15%. Given Bank of Nova Scotia’s stronger consensus rating and higher probable upside, analysts plainly believe Bank of Nova Scotia is more favorable than Banco Santander Brasil.

Valuation and Earnings

This table compares Banco Santander Brasil and Bank of Nova Scotia”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Santander Brasil	$42.52 billion	0.53	$2.29 billion	N/A	N/A
Bank of Nova Scotia	$52.70 billion	1.64	$5.56 billion	$4.81	14.58

Bank of Nova Scotia has higher revenue and earnings than Banco Santander Brasil.

Volatility and Risk

Banco Santander Brasil has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares Banco Santander Brasil and Bank of Nova Scotia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander Brasil	7.10%	10.53%	1.04%
Bank of Nova Scotia	12.40%	12.49%	0.67%

Institutional and Insider Ownership

14.5% of Banco Santander Brasil shares are held by institutional investors. Comparatively, 49.1% of Bank of Nova Scotia shares are held by institutional investors. 0.1% of Banco Santander Brasil shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Banco Santander Brasil pays an annual dividend of $0.27 per share and has a dividend yield of 4.5%. Bank of Nova Scotia pays an annual dividend of $3.21 per share and has a dividend yield of 4.6%. Bank of Nova Scotia pays out 66.7% of its earnings in the form of a dividend. Bank of Nova Scotia has increased its dividend for 14 consecutive years. Bank of Nova Scotia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Bank of Nova Scotia beats Banco Santander Brasil on 12 of the 15 factors compared between the two stocks.

About Banco Santander Brasil

Banco Santander (Brasil) S.A., together with its subsidiaries, provides various banking products and services to individuals, small and medium enterprises, and corporate customers in Brazil and internationally. The company operates through Commercial Banking and Global Wholesale Banking segments. It offers local loans, commercial financing options, development bank funds, and cash management services; export and import financing, guarantees, structuring of asset services. In addition, the company provides financing and advisory services for infrastructure projects and capital markets instruments, as well as offers equity transactions and mergers and acquisitions services. Further, it offers foreign exchange products, derivatives, and investments to institutional investors, corporate clients, and individuals. Additionally, the company provides research services, as well as offers brokerage services for corporate, institutional, and individual investors. Furthermore, it provides deposits and other bank funding instruments, and debit and credit cards. The company provides financial services and products to its customers through multichannel distribution network comprising branches, mini-branches, ATMs, call centers, Internet banking, and mobile banking. Banco Santander (Brasil) S.A. was incorporated in 1985 and is headquartered in São Paulo, Brazil. The company operates as a subsidiary of Banco Santander, S.A.

About Bank of Nova Scotia

The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates through Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets segments. The company offers financial advice and solutions, and banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance to individuals; and retail automotive financing solutions. It also provides business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses. In addition, it provides wealth management advice and solutions, including online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services; and retail mutual funds, exchange traded funds, liquid alternatives, and institutional funds. The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada.