This High-Yield Bank Stock Is Safer Than You Think
Banks are generally meant to be conservatively run businesses, though some take on bigger risks than they should. Investors are treating Bank of Nova Scotia (NYSE: BNS) as if it's a risky player today, pushing its yield up to a relatively high 5.6%. By comparison, SPDR S&P Bank ETF has a yield of just 3% or so. Here's what is going on at Bank of Nova Scotia and why it's a solid risk/reward trade-off for most long-term dividend investors.
The first thing that investors need to understand about Bank of Nova Scotia -- or Scotiabank, as it is more commonly known -- is that it hails from Canada. That's not a small issue. The Canadian government strictly regulates the country's banking industry. It has created a system in which a small number of large banks dominate the domestic market. Scotiabank is one of those banks, and it is unlikely to be unseated anytime soon. This is a solid foundation for growth opportunities elsewhere (more on this in a second).
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Source Fool.com
