Tuesday, May 27, 2008

BNS earnings down, dividend up

The dividend train continues to roll on at Bank of Nova Scotia (BNS), which is a Canadian bank with large Latin America operations. BNS reported a 6% drop in second quarter profit from 2007 levels, but they still managed to increase their quarterly dividend by 4.3% from $0.47 to $0.49. I always appreciate the raise as a shareholder. Higher provisions for credit losses and lower capital markets revenue contributed to the earnings decline. Scotiabank said it was unlikely to meet its objective of 7 to 12 percent growth in earnings per share for the year, even as it noted that second-quarter results were better than the first quarter's, and other signals pointed to a stronger second half. The bank also did not rule out acquisitions of cheap U.S. banks in the near future.

This dividend raise by BNS continues the pattern of 2 increases per year going back a few years. The stock is now yielding 4.1%. Royal Bank of Canada (RY) on the other hand actually failed to increase their semi-annual dividend last quarter which ended the pattern they held since January 2005. I summarized the first quarter in the Canadian banking world back in March.

From BNS Investor Relations
The following is a record of increases in the quarterly dividend per common share for the fiscal period 2005 to 2008:

Fiscal 2008 - 1st quarter - increased from 45 cents to 47 cents. 3rd quarter - increased from 47 cents to 49 cents.
Fiscal 2007 - 1st quarter - increased from 39 cents to 42 cents. 3rd quarter - increased from 42 cents to 45 cents.
Fiscal 2006 - 1st quarter - increased from 34 cents to 36 cents. 3rd quarter - increased from 36 to 39 cents.
Fiscal 2005 - 1st quarter - increased from 30 cents to 32 cents. 3rd quarter - increased from 32 to 34 cents.


Dividend Growth Investor said...

Increasing dividends twice per year is pretty impressive. Of the dividend aristocrats that I follow only one company has done that consistently over the past decade.

Best Regards,


MG (moneygardener) said...

DGI - what company is that?

Dividend Growth Investor said...

The company is STT- State Street.

I added this article to my weekly reviews.