Comparing Bank of Nova Scotia (BNS) & SB One Bancorp (SBBX)

Bank of Nova Scotia (NYSE:BNS) and SB One Bancorp (NASDAQ:SBBX) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Insider and Institutional Ownership

48.3% of Bank of Nova Scotia shares are held by institutional investors. Comparatively, 43.4% of SB One Bancorp shares are held by institutional investors. 14.4% of SB One Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Bank of Nova Scotia and SB One Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of Nova Scotia $31.11 billion 2.12 $6.64 billion $5.44 9.92
SB One Bancorp $67.46 million 3.28 $9.92 million $1.86 12.53

Bank of Nova Scotia has higher revenue and earnings than SB One Bancorp. Bank of Nova Scotia is trading at a lower price-to-earnings ratio than SB One Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bank of Nova Scotia and SB One Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of Nova Scotia 19.86% 13.93% 0.89%
SB One Bancorp 19.25% 10.42% 1.08%

Analyst Recommendations

This is a breakdown of recent ratings for Bank of Nova Scotia and SB One Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Nova Scotia 0 7 2 0 2.22
SB One Bancorp 0 0 3 0 3.00

Bank of Nova Scotia currently has a consensus target price of $84.67, indicating a potential upside of 56.94%. SB One Bancorp has a consensus target price of $29.00, indicating a potential upside of 24.46%. Given Bank of Nova Scotia’s higher possible upside, equities analysts plainly believe Bank of Nova Scotia is more favorable than SB One Bancorp.

Volatility and Risk

Bank of Nova Scotia has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, SB One Bancorp has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Dividends

Bank of Nova Scotia pays an annual dividend of $2.61 per share and has a dividend yield of 4.8%. SB One Bancorp pays an annual dividend of $0.30 per share and has a dividend yield of 1.3%. Bank of Nova Scotia pays out 48.0% of its earnings in the form of a dividend. SB One Bancorp pays out 16.1% 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. Bank of Nova Scotia has increased its dividend for 2 consecutive years and SB One Bancorp has increased its dividend for 2 consecutive years.

Summary

Bank of Nova Scotia beats SB One Bancorp on 9 of the 16 factors compared between the two stocks.

About Bank of Nova Scotia

The Bank of Nova Scotia provides various banking products and services in North America, Latin America, the Caribbean and Central America, and the Asia-Pacific. The company offers financial advice and solutions, and day-to-day banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and related creditor insurance to individuals and small businesses; and commercial banking solutions comprising lending, deposit, cash management, and trade finance solutions to medium and large businesses, including automotive dealers and their customers. It is also involved in the provision of investment and wealth management advice, services, products, and solutions to customers and advisors; wealth management solutions, such as private customer, online brokerage, full-service brokerage, pension, and institutional customer services, as well as asset management business focusing on developing investment solutions for retail and institutional investors; and international banking services for retail, corporate, and commercial customers. In addition, the company offers corporate lending; trade finance and cash management; investment banking services, including corporate finance, and mergers and acquisitions; fixed income and equity underwriting, sales, trading, and research services; prime brokerage and stock lending services; foreign exchange sales and trading services; commodity derivatives sales and trading; and collateral management services for corporate, government, and institutional investor clients. Further, it provides Internet, mobile, and telephone banking services. The company operates a network of 955 branches and approximately 3,644 automated banking machines in Canada; and approximately 1,800 branches internationally, as well as contact and business support centers. The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada.

About SB One Bancorp

SB One Bancorp operates as a bank holding company for SB One Bank that provides commercial banking and related financial services to individual, business, and government customers. It operates in two segments, Banking and Financial Services, and Insurance Services. The company's deposit products include personal and business checking, money market, and savings accounts, as well as time and demand deposits. Its loan portfolio comprises commercial, consumer, residential real estate, home equity, and personal loans. The company also operates as a full service general insurance agency, which offers commercial and personal lines of insurance. It operates eight branches located in Sussex County, New Jersey; two branches in Essex County, New Jersey; one branch in Warren County, New Jersey; one branch in Bergen County, New Jersey; one branch in Middlesex County, New Jersey; one branch in Union County, New Jersey; and one branch in Queens County, New York. The company was formerly known as Sussex Bancorp and changed its name to SB One Bancorp in April 2018. SB One Bancorp was founded in 1975 and is based in Rockaway, New Jersey.

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