Then and Now – Bank of Nova Scotia
This post is a continuation of my series Then and Now where I revisit some older blogposts and either rip them to shreds (because my thinking has changed) or I’ll confirm my position on some personal finance topics or specific investments.
You can check out my previous posts in this series here:
This post is an update on Bank of Nova Scotia.
- I started writing about Bank of Nova Scotia (BNS) on this site in more detail back in 2011. As part of our 2011 financial goals, I wrote the following:
“Bank of Nova Scotia (BNS) is one stock I cannot run my synthetic DRIP with yet. This is because I don’t own enough BNS shares for the dividends paid each quarter to buy one full share. So, I’ve started my full DRIP with their transfer agent (Computershare) to help me get there. Last year I managed to contribute at least $50 per month into BNS stock, no commission fees, based on the cost of an envelope, a stamp and my personal sacrifice of walking to the mailbox up the road. Hopefully later this year, taking advantage of any BNS stock price dips under $55, I can add more to my position. Right now, I feel BNS is valued quite high and I won’t be adding to my holdings anytime over the next month or so.”
- I thought back then BNS, along with other big Canadian banks, was a solid stock to buy and mostly forget.
- I believed bank stocks have a good home in registered accounts (like TFSAs, RRSPs) because you can reinvest dividends tax-free or tax-deferred.
- I also believe bank stocks have a good home in taxable accounts, because you can take advantage of the Canadian Dividend Tax Credit.
- I bought Bank of Nova Scotia because it’s a core holding of most Canadian Exchange Traded Funds (ETFs) and big bank mutual funds. It has paid dividends for over 100 years.
- I recall I started buying BNS around $47 in early 2010.
- BNS is now trading close to a 52-week high, at the time of this post around $72 per share.
- Since I started investing in this stock, dividends have increased by almost 40%.
- I now DRIP this stock; a couple of shares per quarter are reinvested. I have no intention of stopping this.
- I figure the dividend income from this company alone, might be enough to pay for my car insurance for life in a few years, or anything else costing me $1,000 or so per year.
My decision to buy (and hold) this company was an excellent call to date. Purchasing individual stocks has risks and the buyer must always beware. There are no guarantees with this company and I have no idea what the future holds. I will however continue to own this company for the foreseeable future.
What’s your take on Bank of Nova Scotia as an investment? Own it?
I like the new mature look.!!! Keep up the great work. Always informative…
Thanks for this pick. It’s good to know your revisit your forecasts to see if the logic behind them holds up to scrutiny. Good post.
I’ve never directly owned either BNS or BMO. We hold varying amounts of the other four. Not sure why we selected the ones we did. We do have a fair amount in FIE so there is some exposure to all of the banks through it. Heck I even have the maximum allowed shares in our local credit union. Probably too much exposure to financials for most but we’re fine with it.
Same. I probably need to limit my exposure to BNS over time but it’s been both a great growth stock and dividend stock – I find it hard to sell my winners. I also hold the other four you referred to.
As you know BNS is what my wife bought and set up DRIP’a, with Computershare, for the grandkids many years ago. They have seen the same performance and income growth as you’ve experienced. My grand daughter is using the Direct Debit to contribute her $50 per month. Buy, ignore and add more when one can!
What is Direct Debit? Are you not using Computershare to run your grandkids’ DRIPs and SPPs?
Yes, buy, ignore and add more over time!
No need for the trip to mail cheques, they take the $50 right out of her account each month.
Is that with ShareOwner? I recall I needed to send in my cheques to Computershare or CST (the transfer agents).
No with Computershare. BNS and many others but one needs to confirm if the company allows Ditect Debit. CST does not have it.
That’s what I thought, thanks for confirming.
Just to clarify, Computershare does allow direct debit for some companies, but not all.