Reviewing Bank of Nova Scotia (NYSE:BNS) & Banco Latinoamericano de Comercio Exterior (NYSE:BLX)

Banco Latinoamericano de Comercio Exterior (NYSE:BLX) and Bank of Nova Scotia (NYSE:BNS) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Dividends

Banco Latinoamericano de Comercio Exterior pays an annual dividend of $2.75 per share and has a dividend yield of 4.6%. Bank of Nova Scotia pays an annual dividend of $3.21 per share and has a dividend yield of 3.7%. Banco Latinoamericano de Comercio Exterior pays out 45.7% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 61.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Banco Latinoamericano de Comercio Exterior has raised its dividend for 2 consecutive years and Bank of Nova Scotia has raised its dividend for 14 consecutive years. Banco Latinoamericano de Comercio Exterior is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Banco Latinoamericano de Comercio Exterior and Bank of Nova Scotia, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Latinoamericano de Comercio Exterior	0	0	0	1	4.00
Bank of Nova Scotia	0	3	2	0	2.40

Bank of Nova Scotia has a consensus target price of $117.00, indicating a potential upside of 34.43%. Given Bank of Nova Scotia’s higher probable upside, analysts clearly believe Bank of Nova Scotia is more favorable than Banco Latinoamericano de Comercio Exterior.

Volatility and Risk

Banco Latinoamericano de Comercio Exterior has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Institutional & Insider Ownership

19.5% of Banco Latinoamericano de Comercio Exterior shares are owned by institutional investors. Comparatively, 49.1% of Bank of Nova Scotia shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Banco Latinoamericano de Comercio Exterior and Bank of Nova Scotia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Latinoamericano de Comercio Exterior	27.77%	14.36%	1.79%
Bank of Nova Scotia	13.38%	13.16%	0.70%

Valuation & Earnings

This table compares Banco Latinoamericano de Comercio Exterior and Bank of Nova Scotia”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Latinoamericano de Comercio Exterior	$836.85 million	2.65	$226.88 million	$6.02	9.90
Bank of Nova Scotia	$52.70 billion	2.02	$5.56 billion	$5.24	16.61

Bank of Nova Scotia has higher revenue and earnings than Banco Latinoamericano de Comercio Exterior. Banco Latinoamericano de Comercio Exterior is trading at a lower price-to-earnings ratio than Bank of Nova Scotia, indicating that it is currently the more affordable of the two stocks.

Summary

Banco Latinoamericano de Comercio Exterior beats Bank of Nova Scotia on 9 of the 17 factors compared between the two stocks.

About Banco Latinoamericano de Comercio Exterior

Banco Latinoamericano de Comercio Exterior, S. A., a multinational bank, primarily engages in the financing of foreign trade in Latin America and the Caribbean. The company operates in two segments, Commercial and Treasury. It offers bilateral loans; structured loans including syndicated and clubbed, such as acquisition and pre-export financing, A/B loan financing, bridge loans, and liability management; and project financing. The company also provides letter of credit comprising import and export letters of credit, and credit discounting and financing, as well as usance payable at sight; stand-by services; bank guarantees, including first demand and local guarantees; import and export documentary collection; irrevocable reimbursement undertaking; and canal tolls. In addition, it offers liquidity and investment solutions, such as time deposits, DDA accounts, Yankee certificate of deposits, and EMTN private placement services, as well as supply chain finance services. The company primarily serves financial institutions, corporations, and sovereigns and state-owned entities. Banco Latinoamericano de Comercio Exterior, S. A.was formerly known as Banco Latinoamericano de Exportaciones, S.A. and changed its name to Banco Latinoamericano de Comercio Exterior, S. A. in June 2009. The company was founded in 1975 and is headquartered in Panama City, the Republic of Panama.

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.