You’ve probably heard it before: Scotiabank is the "international" one. For years, that was a polite way of saying the bank of nova scotia stock was riskier than its Big Five peers. While RBC and TD were busy playing it safe in North America, Scotiabank was out in the weeds of Latin America. Sometimes it worked. Often, it just meant more volatility and a lower share price.
But honestly? Things are looking different as we head into early 2026.
If you look at the ticker BNS right now, you aren't just seeing a Canadian dividend play. You're seeing the results of a massive, somewhat painful, pivot. CEO Scott Thomson basically spent the last two years "de-risking" the entire machine. They sold off the Colombian business. They ditched Central American assets. Instead, they put a massive stake into KeyCorp in the U.S. and opened a shiny new office in Dallas.
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It’s a vibe shift. A big one.
The U.S. Pivot and What It Means for Your Portfolio
For a long time, investors slapped a "discount" on bank of nova scotia stock. Why? Because earning a dollar in a volatile emerging market isn't the same as earning a dollar in Ohio or Texas. Investors want stability.
By the end of 2025, Scotiabank managed to pull about 16% of its total earnings from the U.S. That is a structural change that most people are still sleeping on. This isn't just about moving numbers around; it's about changing the quality of the bank's profit. When the earnings are more predictable, the stock's P/E ratio usually goes up. Analysts call this "multiple expansion." I call it finally getting some respect on the NYSE.
Check out the current state of the business lines:
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- Canadian Banking: This is still the engine room. Management is telegraphed double-digit growth here for 2026, mostly through better "deposit mix"—basically getting more of your cheap savings accounts and less of those expensive GICs.
- Global Wealth Management: A sleeper hit. They grew assets under management to roughly $432 billion last year.
- International Banking: It’s smaller now, and that’s the point. It’s facing some headwinds in Mexico and Chile with higher "provisions for credit losses" (PCLs), but it's no longer the tail wagging the dog.
That Massive 4.4% Dividend: Is It Safe?
Let’s talk about the real reason most people hold bank of nova scotia stock: the check in the mail. Scotiabank has been paying dividends since 1832. That is not a typo. They were paying out before the American Civil War even started.
Currently, the yield is hovering around 4.4%. In a world where interest rates are finally cooling off, that is a very juicy number. But you have to look at the payout ratio. It’s sitting near 75% on a trailing basis.
Is that high? Yeah, a bit.
Most Canadian banks like to stay under 50%. However, if you look at the 2026 earnings estimates, that ratio is projected to drop toward the 60% range as profit grows. The bank’s "Fortress" balance sheet—specifically that 13.2% CET1 ratio—means the dividend isn't just safe; it’s practically carved in granite. Just don't expect a 10% raise this year. Expect a modest, single-digit bump that keeps pace with inflation.
Why the Market is Still "Kinda" Skeptical
If everything is so great, why is the stock still trading at a forward P/E of around 11?
Markets have long memories. Investors are still watching those "one-time" restructuring charges. In late 2025, the bank took another $373 million hit to trim the workforce. They’ve cut thousands of jobs over the last three years.
Management says this makes them "lean and digital." Skeptics say it’s a sign that organic growth is hard to find. Honestly, it’s probably a bit of both. Scott Thomson is betting the house that a smaller, more tech-heavy workforce can generate higher returns on equity (ROE). They are targeting 14% ROE, and they're getting closer, hitting 12.5% in the final quarter of last year.
Analysts are Playing it Safe
Right now, the consensus on bank of nova scotia stock is a "Hold."
RBC’s Darko Mihelic and Jefferies’ John Aiken both recently reiterated "Hold" ratings with price targets in the high $90s (CAD). They want to see more proof that the U.S. strategy—specifically that KeyCorp investment—actually trickles down to the bottom line.
On the flip side, you have bulls like Matthew Lee at Canaccord Genuity who have a "Buy" rating. The argument there is simple: Scotiabank is the cheapest of the Big Five. If they even slightly close the gap with RBC or TD, shareholders are going to make a killing on the price appreciation alone.
What You Should Actually Do Now
Investing in a bank like this isn't about catching a moonshot. It's about "Total Return"—the combination of that 4% yield and steady capital gains.
Here is the move for 2026:
- Check your exposure: If you already own a lot of TD or Royal Bank, BNS is a great diversifier because of its unique footprint in the Pacific Alliance (Mexico, Chile, Peru) and its new U.S. corridor.
- Watch the PCLs: Keep an eye on the "Provisions for Credit Losses" in the next quarterly report. If those start spiking in Mexico, the stock might take a short-term haircut.
- DRIP it: If you don't need the cash right now, use a Dividend Reinvestment Plan. Buying more shares at these valuations while the yield is high is a classic compounding move.
- Tax Efficiency: For Canadian investors, holding this in a TFSA is a no-brainer to keep that dividend tax-free. For U.S. investors, remember there’s a 15% withholding tax on Canadian dividends in a standard brokerage account (though usually not in an IRA).
The era of Scotiabank being the "wild child" of Canadian banking is over. It’s becoming a North American powerhouse with a side of Latin American growth. It might be boring, but in this market, boring is exactly what pays the bills.
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Next Steps for Investors: Review your current portfolio allocation to the financial sector. If you are underweight on high-yield, stable-value stocks, consider a starter position in bank of nova scotia stock before the next ex-dividend date in early April. You can also set a price alert for the $100 CAD (or $73 USD) mark; crossing that threshold often signals a technical breakout that could lead to a fresh rally.