First National Bank Alaska (OTCMKTS:FBAK – Get Rating) and Bank of Nova Scotia (NYSE:BNS – Get Rating) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.
Dividends
First National Bank Alaska pays an annual dividend of $12.80 per share and has a dividend yield of 6.1%. Bank of Nova Scotia pays an annual dividend of $3.04 per share and has a dividend yield of 6.3%. First National Bank Alaska pays out 69.6% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 54.7% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of current ratings for First National Bank Alaska and Bank of Nova Scotia, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First National Bank Alaska | 0 | 0 | 0 | 0 | N/A |
| Bank of Nova Scotia | 0 | 9 | 1 | 0 | 2.10 |
Volatility & Risk
First National Bank Alaska has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.
Profitability
This table compares First National Bank Alaska and Bank of Nova Scotia’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First National Bank Alaska | N/A | 10.86% | 1.08% |
| Bank of Nova Scotia | 17.03% | 15.08% | 0.76% |
Institutional and Insider Ownership
0.9% of First National Bank Alaska shares are owned by institutional investors. Comparatively, 45.2% of Bank of Nova Scotia shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares First National Bank Alaska and Bank of Nova Scotia’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First National Bank Alaska | $174.22 million | 3.82 | $58.24 million | $18.39 | 11.42 |
| Bank of Nova Scotia | $36.40 billion | 1.57 | $7.70 billion | $5.56 | 8.62 |
Bank of Nova Scotia has higher revenue and earnings than First National Bank Alaska. Bank of Nova Scotia is trading at a lower price-to-earnings ratio than First National Bank Alaska, indicating that it is currently the more affordable of the two stocks.
Summary
Bank of Nova Scotia beats First National Bank Alaska on 10 of the 14 factors compared between the two stocks.
About First National Bank Alaska
First National Bank Alaska engages in the provision of commercial banking services. It offers its banking services to the industries, business, personal, wealth management, and also provides home loans. The company was founded by Winfield Ervin, Sr. in 1922 and is headquartered in Anchorage, AK.
About Bank of Nova Scotia
The Bank of Nova Scotia engages in the provision of financial products and services including personal, commercial, corporate, and investment banking. It operates through the following segments: Canadian Banking, International Banking, Global Wealth Management, Global Banking and Markets, and Other. The Other segment includes group treasury and smaller operating segments. The company was founded on March 30, 1832 and is headquartered in Toronto, Canada.
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