Atlantic Coast Financial (ACFC) vs. Bank of Nova Scotia (BNS) Financial Analysis

Atlantic Coast Financial (NASDAQ: ACFC) and Bank of Nova Scotia (NYSE:BNS) are both financials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares Atlantic Coast Financial and Bank of Nova Scotia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantic Coast Financial 7.66% 5.78% 0.57%
Bank of Nova Scotia 22.20% 14.62% 0.90%

Insider and Institutional Ownership

60.4% of Atlantic Coast Financial shares are held by institutional investors. Comparatively, 46.3% of Bank of Nova Scotia shares are held by institutional investors. 10.9% of Atlantic Coast Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Atlantic Coast Financial and Bank of Nova Scotia’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantic Coast Financial $41.36 million 3.91 $3.17 million $0.20 52.00
Bank of Nova Scotia $28.86 billion 2.58 $6.12 billion $5.15 12.07

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Atlantic Coast Financial and Bank of Nova Scotia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantic Coast Financial 0 1 0 0 2.00
Bank of Nova Scotia 0 0 9 0 3.00

Atlantic Coast Financial presently has a consensus price target of $8.50, suggesting a potential downside of 18.27%. Bank of Nova Scotia has a consensus price target of $90.00, suggesting a potential upside of 44.74%. Given Bank of Nova Scotia’s stronger consensus rating and higher possible upside, analysts clearly believe Bank of Nova Scotia is more favorable than Atlantic Coast Financial.

Dividends

Bank of Nova Scotia pays an annual dividend of $2.56 per share and has a dividend yield of 4.1%. Atlantic Coast Financial does not pay a dividend. Bank of Nova Scotia pays out 49.7% of its earnings in the form of a dividend.

Volatility & Risk

Atlantic Coast Financial has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Summary

Bank of Nova Scotia beats Atlantic Coast Financial on 11 of the 16 factors compared between the two stocks.

Atlantic Coast Financial Company Profile

Atlantic Coast Financial Corporation is a thrift holding company. The Company, through its subsidiary, Atlantic Coast Bank (the Bank), a federally chartered and insured stock savings bank supervised by the Office of the Comptroller of the Currency (the OCC), serves the Northeast Florida, Central Florida and Southeast Georgia markets. The Bank focuses on attracting deposits and investing those funds primarily in loans, including commercial real estate loans, consumer loans, first mortgages on owner-occupied, one- to four-family residences and home equity loans. Additionally, the Bank invests funds in multi-family residential loans, commercial business loans, and commercial and residential construction loans. The Bank originates commercial real estate loans and commercial and industrial loans with small to mid-size businesses for the purposes of purchasing real estate and inventory, financing equipment, and providing working capital.

Bank of Nova Scotia Company Profile

The Bank of Nova Scotia is an international bank and a financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific. The Bank offers a range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. Its segments include Canadian Banking, which provides a suite of financial advice and banking solutions to retail, small business, commercial and wealth management customers in Canada; International Banking, which provides a range of financial products, solutions and advice to retail and commercial customers in select regions outside of Canada; Global Banking and Markets, which provides corporate banking, investment banking, capital markets and transaction banking solutions, and Other, which represents smaller operating segments, including Group Treasury.

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