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

Risk and Volatility

Bank of Nova Scotia has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Lakeland Bancorp has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Bank of Nova Scotia and Lakeland Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of Nova Scotia 0 6 1 0 2.14
Lakeland Bancorp 0 0 3 0 3.00

Bank of Nova Scotia presently has a consensus target price of $82.33, suggesting a potential upside of 53.66%. Lakeland Bancorp has a consensus target price of $20.83, suggesting a potential upside of 25.73%. Given Bank of Nova Scotia’s higher probable upside, analysts clearly believe Bank of Nova Scotia is more favorable than Lakeland Bancorp.

Dividends

Bank of Nova Scotia pays an annual dividend of $2.66 per share and has a dividend yield of 5.0%. Lakeland Bancorp pays an annual dividend of $0.50 per share and has a dividend yield of 3.0%. Bank of Nova Scotia pays out 48.9% of its earnings in the form of a dividend. Lakeland Bancorp pays out 37.3% 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 Lakeland Bancorp has increased its dividend for 9 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Bank of Nova Scotia 19.20% 13.55% 0.87%
Lakeland Bancorp 25.63% 10.34% 1.11%

Insider & Institutional Ownership

45.2% of Bank of Nova Scotia shares are held by institutional investors. Comparatively, 55.2% of Lakeland Bancorp shares are held by institutional investors. 4.2% of Lakeland Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Bank of Nova Scotia and Lakeland Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of Nova Scotia $31.11 billion 2.10 $6.64 billion $5.44 9.85
Lakeland Bancorp $235.43 million 3.55 $63.40 million $1.34 12.37

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

Summary

Lakeland Bancorp beats Bank of Nova Scotia 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.

Lakeland Bancorp Company Profile

Lakeland Bancorp, Inc. operates as the bank holding company for Lakeland Bank that provides various banking products and services for individuals and small to medium sized businesses. It offers commercial banking services, including savings, money market, and time accounts, as well as demand deposits; lending solutions, such as short and medium term loans, lines of credit, letters of credit, inventory and accounts receivable financing, real estate construction loans, mortgage loans, small business administration loans, commercial real estate loans, commercial and industrial loans, and equipment financing, as well as merchant credit card services; and Internet banking, mobile banking, wire transfer, night depository, and cash management services. The company also provides consumer banking services, including checking accounts, savings accounts, money market accounts, certificates of deposit, secured and unsecured loans, consumer installment loans, mortgage loans, and safe deposit services, as well as Internet banking services. In addition, it offers investment and advisory services; and non-deposit products, which include securities brokerage services, including mutual funds and variable annuities. As of January 28, 2019, the company operated 54 branch offices throughout Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties in New Jersey; 6 New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Newton, Teaneck, and Waldwick; 1 commercial lending center in New York to serve the Hudson Valley region; and 1 commercial loan production office serving Middlesex and Monmouth counties in New Jersey. Lakeland Bancorp, Inc. was founded in 1989 and is headquartered in Oak Ridge, New Jersey.



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