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

Analyst Recommendations

This is a breakdown of recent ratings for Bank of Nova Scotia and German American Bancorp., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Nova Scotia 0 5 5 0 2.50
German American Bancorp. 0 1 0 0 2.00

Bank of Nova Scotia presently has a consensus target price of $72.30, indicating a potential upside of 80.98%. German American Bancorp. has a consensus target price of $34.00, indicating a potential upside of 34.49%. Given Bank of Nova Scotia’s stronger consensus rating and higher possible upside, analysts plainly believe Bank of Nova Scotia is more favorable than German American Bancorp..

Insider & Institutional Ownership

47.8% of Bank of Nova Scotia shares are owned by institutional investors. Comparatively, 42.3% of German American Bancorp. shares are owned by institutional investors. 7.9% of German American Bancorp. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Bank of Nova Scotia 18.06% 13.75% 0.83%
German American Bancorp. 26.68% 11.54% 1.47%

Volatility & Risk

Bank of Nova Scotia has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, German American Bancorp. has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Dividends

Bank of Nova Scotia pays an annual dividend of $2.77 per share and has a dividend yield of 6.9%. German American Bancorp. pays an annual dividend of $0.76 per share and has a dividend yield of 3.0%. Bank of Nova Scotia pays out 51.6% of its earnings in the form of a dividend. German American Bancorp. pays out 32.3% 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. Bank of Nova Scotia has increased its dividend for 2 consecutive years and German American Bancorp. has increased its dividend for 7 consecutive years.

Valuation and Earnings

This table compares Bank of Nova Scotia and German American Bancorp.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of Nova Scotia $35.10 billion 1.38 $6.31 billion $5.37 7.44
German American Bancorp. $221.98 million 3.04 $59.22 million $2.35 10.76

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

Summary

Bank of Nova Scotia beats German American Bancorp. on 10 of the 17 factors compared between the two stocks.

Bank of Nova Scotia Company Profile

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.

German American Bancorp. Company Profile

German American Bancorp, Inc. operates as the bank holding company for German American Bancorp that provides retail and commercial banking services. The company operates through three segments: Core Banking, Trust and Investment Advisory Services, and Insurance Operations. The Core Banking segment accepts various deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Trust and Investment Advisory Services segment provides trust, investment advisory, and brokerage services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. As of February 13, 2018, the company operated 53 banking offices in 19 contiguous southern Indiana counties and 1 northern Kentucky County. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.

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