Bank of Nova Scotia (NYSE:BNS – Get Free Report) and Lake Shore Bancorp (NASDAQ:LSBK – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.
Insider and Institutional Ownership
49.1% of Bank of Nova Scotia shares are owned by institutional investors. Comparatively, 8.7% of Lake Shore Bancorp shares are owned by institutional investors. 8.4% of Lake Shore Bancorp shares are owned by company insiders. 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.
Analyst Ratings
This is a breakdown of current recommendations for Bank of Nova Scotia and Lake Shore Bancorp, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bank of Nova Scotia | 0 | 4 | 5 | 1 | 2.70 |
| Lake Shore Bancorp | 0 | 0 | 0 | 1 | 4.00 |
Dividends
Bank of Nova Scotia pays an annual dividend of $3.29 per share and has a dividend yield of 3.7%. Lake Shore Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 2.0%. Bank of Nova Scotia pays out 59.5% of its earnings in the form of a dividend. Lake Shore Bancorp pays out 31.9% 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 14 consecutive years. Bank of Nova Scotia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Bank of Nova Scotia has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Lake Shore Bancorp has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500.
Earnings & Valuation
This table compares Bank of Nova Scotia and Lake Shore Bancorp”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bank of Nova Scotia | $52.70 billion | 2.04 | $5.56 billion | $5.53 | 15.99 |
| Lake Shore Bancorp | $39.56 million | 3.62 | $7.27 million | $1.13 | 16.15 |
Bank of Nova Scotia has higher revenue and earnings than Lake Shore Bancorp. Bank of Nova Scotia is trading at a lower price-to-earnings ratio than Lake Shore Bancorp, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Bank of Nova Scotia and Lake Shore Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bank of Nova Scotia | 13.91% | 16.12% | 0.72% |
| Lake Shore Bancorp | 20.74% | 5.91% | 1.15% |
Summary
Bank of Nova Scotia beats Lake Shore Bancorp on 10 of the 17 factors compared between the two stocks.
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 Lake Shore Bancorp
Lake Shore Bancorp, Inc. operates as a savings and loan holding company for Lake Shore Servings Bank. It offers personal services such as checking, savings, lending, banking, debit card, e-services, and online banking; and business services including deposit products, commercial loans, and business e-statements. The company was founded in 2006 and is headquartered in Dunkirk, NY.
Receive News & Ratings for Bank of Nova Scotia Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Bank of Nova Scotia and related companies with MarketBeat.com's FREE daily email newsletter.
