Contrasting Bank of Nova Scotia (NYSE:BNS) and Peoples Financial (OTCMKTS:PFBX)

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

Volatility and Risk

Peoples Financial has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Institutional & Insider Ownership

32.8% of Peoples Financial shares are held by institutional investors. Comparatively, 49.1% of Bank of Nova Scotia shares are held by institutional investors. 28.1% of Peoples Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Peoples Financial	20.91%	12.26%	0.99%
Bank of Nova Scotia	9.84%	11.14%	0.57%

Valuation & Earnings

This table compares Peoples Financial and Bank of Nova Scotia”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Financial	$39.52 million	2.06	$9.17 million	$1.92	9.11
Bank of Nova Scotia	$33.11 billion	1.99	$5.49 billion	$4.44	12.06

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

Dividends

Peoples Financial pays an annual dividend of $0.36 per share and has a dividend yield of 2.1%. Bank of Nova Scotia pays an annual dividend of $3.13 per share and has a dividend yield of 5.8%. Peoples Financial pays out 18.8% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 70.5% 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.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Peoples Financial and Bank of Nova Scotia, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peoples Financial	0	0	0	0	N/A
Bank of Nova Scotia	1	3	0	1	2.20

Bank of Nova Scotia has a consensus price target of $69.00, indicating a potential upside of 28.88%. Given Bank of Nova Scotia’s higher probable upside, analysts plainly believe Bank of Nova Scotia is more favorable than Peoples Financial.

Summary

Bank of Nova Scotia beats Peoples Financial on 9 of the 15 factors compared between the two stocks.

About Peoples Financial

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.

About Bank of Nova Scotia

The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates through Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets segments. The company offers financial advice and solutions, and banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance to individuals; and retail automotive financing solutions. It also provides business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses. In addition, it provides wealth management advice and solutions, including online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services; and retail mutual funds, exchange traded funds, liquid alternatives, and institutional funds. The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada.