Bank of Nova Scotia (NYSE: BNS), or Scotiabank as it is more commonly called, has a generous 5.8% yield on its dividend. By comparison, fellow Canadian banking giant Toronto-Dominion Bank (NYSE: TD) yield is 4.3%. Why the difference? There's a long-term reason, and it could be a big issue over the near term.

Canadian banks are conservative by their very nature. Heavy government regulation is largely responsible for this, and for limiting competition to the point where the largest banks have defensible, entrenched positions. Scotiabank is one of the biggest banks in Canada, and that's highly unlikely to change anytime soon.

Image source: Getty Images.

Continue reading

Source Fool.com