KBC Group (OTCMKTS:KBCSY – Get Free Report) and Bank of Nova Scotia (NYSE:BNS – Get Free Report) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.
Volatility & Risk
KBC Group has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.
Profitability
This table compares KBC Group and Bank of Nova Scotia’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| KBC Group | 14.98% | 13.51% | 0.93% |
| Bank of Nova Scotia | 13.38% | 13.16% | 0.70% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| KBC Group | 1 | 4 | 1 | 0 | 2.00 |
| Bank of Nova Scotia | 0 | 3 | 2 | 0 | 2.40 |
Bank of Nova Scotia has a consensus price target of $117.00, indicating a potential upside of 46.12%. Given Bank of Nova Scotia’s stronger consensus rating and higher probable upside, analysts clearly believe Bank of Nova Scotia is more favorable than KBC Group.
Institutional and Insider Ownership
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 will outperform the market over the long term.
Dividends
KBC Group pays an annual dividend of $3.19 per share and has a dividend yield of 4.8%. Bank of Nova Scotia pays an annual dividend of $3.16 per share and has a dividend yield of 3.9%. KBC Group pays out 63.3% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 60.3% 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 raised its dividend for 14 consecutive years.
Earnings & Valuation
This table compares KBC Group and Bank of Nova Scotia”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| KBC Group | $26.56 billion | 2.08 | $4.04 billion | $5.04 | 13.13 |
| Bank of Nova Scotia | $52.70 billion | 1.86 | $5.56 billion | $5.24 | 15.28 |
Bank of Nova Scotia has higher revenue and earnings than KBC Group. KBC Group 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
Bank of Nova Scotia beats KBC Group on 11 of the 16 factors compared between the two stocks.
About KBC Group
KBC Group NV, together with its subsidiaries, provides integrated bank-insurance services primarily for retail, private banking, small and medium sized enterprises, and mid-cap clients. The company offers demand deposits and savings accounts; home and mortgage loans; consumer finance and SME funding services; credit, investment fund and asset management, and life and non-life insurance; and cash management, payments, trade finance, lease, money market, capital market products, and stockbroking services. It also provides digital and mobile banking services. The company was formerly known as KBC Bank and Insurance Holding Company NV and changed its name to KBC Group NV in March 2005. KBC Group NV was incorporated in 1935 and is headquartered in Brussels, Belgium.
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.
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