Bank of Nova Scotia (NYSE:BNS) versus Business First Bancshares (NASDAQ:BFST) Critical Comparison

Bank of Nova Scotia (NYSE:BNSGet Rating) and Business First Bancshares (NASDAQ:BFSTGet Rating) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Bank of Nova Scotia and Business First Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Nova Scotia 0 5 6 0 2.55
Business First Bancshares 0 0 1 1 3.50

Bank of Nova Scotia currently has a consensus price target of $96.09, suggesting a potential upside of 42.34%. Business First Bancshares has a consensus price target of $30.25, suggesting a potential upside of 31.87%. Given Bank of Nova Scotia’s higher possible upside, equities research analysts plainly believe Bank of Nova Scotia is more favorable than Business First Bancshares.

Insider and Institutional Ownership

47.0% of Bank of Nova Scotia shares are held by institutional investors. Comparatively, 32.1% of Business First Bancshares shares are held by institutional investors. 7.6% of Business First Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Bank of Nova Scotia and Business First Bancshares’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of Nova Scotia $31.20 billion 2.60 $7.65 billion $6.35 10.63
Business First Bancshares $206.22 million 2.27 $52.14 million $2.52 9.10

Bank of Nova Scotia has higher revenue and earnings than Business First Bancshares. Business First Bancshares 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 $3.20 per share and has a dividend yield of 4.7%. Business First Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. Bank of Nova Scotia pays out 50.4% of its earnings in the form of a dividend. Business First Bancshares pays out 19.0% 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 1 consecutive years and Business First Bancshares has increased its dividend for 1 consecutive years.

Risk & Volatility

Bank of Nova Scotia has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Business First Bancshares has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Profitability

This table compares Bank of Nova Scotia and Business First Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of Nova Scotia 25.54% 15.22% 0.86%
Business First Bancshares 25.28% 12.60% 1.21%

Summary

Bank of Nova Scotia beats Business First Bancshares on 12 of the 17 factors compared between the two stocks.

Bank of Nova Scotia Company Profile (Get Rating)

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 in four segments: Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets. 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 insurance to individuals; and business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses, including automotive financing solutions to dealers and their customers. It also 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 alternative funds, and institutional funds. In addition, the company offers international banking services for retail, corporate, and commercial customers; and lending and transaction, investment banking advisory, and capital markets access services to corporate customers. Further, it provides online, mobile, and telephone banking services. The company operates a network of 954 branches and approximately 3,766 automated banking machines in Canada; and approximately 1,300 branches and a network of contact and support center internationally. The Bank of Nova Scotia was founded in 1832 and is headquartered in Halifax, Canada.

Business First Bancshares Company Profile (Get Rating)

Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as commercial lines of credit, letters of credit, working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary services and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. As of March 01, 2022, it operates approximately 48 full-service banking centers and three loan production offices across Louisiana, and in the Dallas and Houston markets. Business First Bancshares, Inc. was incorporated in 2006 and is headquartered in Baton Rouge, Louisiana.

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