Bank of Nova Scotia (NYSE:BNS – Get Free Report) and First Bank (NASDAQ:FRBA – Get Free Report) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.
Profitability
This table compares Bank of Nova Scotia and First Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bank of Nova Scotia | 9.84% | 11.14% | 0.57% |
| First Bank | 18.19% | 11.80% | 1.25% |
Analyst Recommendations
This is a summary of current recommendations for Bank of Nova Scotia and First Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bank of Nova Scotia | 1 | 3 | 1 | 1 | 2.33 |
| First Bank | 0 | 0 | 1 | 0 | 3.00 |
Insider & Institutional Ownership
49.1% of Bank of Nova Scotia shares are owned by institutional investors. Comparatively, 64.9% of First Bank shares are owned by institutional investors. 13.1% of First Bank shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Bank of Nova Scotia and First Bank”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bank of Nova Scotia | $52.53 billion | 1.25 | $5.49 billion | $4.18 | 12.69 |
| First Bank | $173.30 million | 1.57 | $20.90 million | $1.59 | 8.72 |
Bank of Nova Scotia has higher revenue and earnings than First Bank. First Bank 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.
Dividends
Bank of Nova Scotia pays an annual dividend of $3.13 per share and has a dividend yield of 5.9%. First Bank pays an annual dividend of $0.24 per share and has a dividend yield of 1.7%. Bank of Nova Scotia pays out 74.9% of its earnings in the form of a dividend. First Bank pays out 15.1% 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.
Risk & Volatility
Bank of Nova Scotia has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, First Bank has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.
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.
About First Bank
First Bank provides various banking products and services to small to mid-sized businesses and individuals. The company accepts various deposits, including non-interest-bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.
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