Why Is Scotiabank's Dividend So High?
Bank of Nova Scotia (NYSE: BNS), more commonly referred to as Scotiabank, is offering a very generous 5.9% dividend yield today. That's more than double what you'd get from Bank of America (NYSE: BAC). Before you jump on board, however, you need to understand a couple of things. Here's why Scotiabank's yield is so high.
The economy goes in cycles, with expansion invariably followed by recession. During the expansion phase, Wall Street is jubilant and stocks move higher. During the recession phase, stocks generally fall. In some cases, such as consumer staples, the headwinds are more theoretical than real. In others, notably banks, there are very obvious risks to face in an economic downturn.
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Source Fool.com
