Societe Generale Group (OTCMKTS:SCGLY) and Bank of Nova Scotia (NYSE:BNS) Critical Survey

Societe Generale Group (OTCMKTS:SCGLY) and Bank of Nova Scotia (NYSE:BNS) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Societe Generale Group has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Dividends

Societe Generale Group pays an annual dividend of $0.19 per share and has a dividend yield of 1.2%. Bank of Nova Scotia pays an annual dividend of $3.16 per share and has a dividend yield of 4.0%. Societe Generale Group pays out 10.6% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 65.7% 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. Bank of Nova Scotia has increased its dividend for 14 consecutive years. Bank of Nova Scotia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Societe Generale Group and Bank of Nova Scotia”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Societe Generale Group	$30.83 billion	1.95	$6.79 billion	$1.80	8.98
Bank of Nova Scotia	$52.70 billion	1.84	$5.56 billion	$4.81	16.41

Societe Generale Group has higher earnings, but lower revenue than Bank of Nova Scotia. Societe Generale Group 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.

Institutional & Insider Ownership

1.0% of Societe Generale Group shares are owned by institutional investors. Comparatively, 49.1% of Bank of Nova Scotia shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Societe Generale Group and Bank of Nova Scotia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Societe Generale Group	22.33%	6.92%	0.35%
Bank of Nova Scotia	12.40%	12.49%	0.67%

Analyst Ratings

This is a summary of recent ratings for Societe Generale Group and Bank of Nova Scotia, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Societe Generale Group	0	5	6	0	2.55
Bank of Nova Scotia	0	3	2	0	2.40

Bank of Nova Scotia has a consensus price target of $106.00, suggesting a potential upside of 34.26%. Given Bank of Nova Scotia’s higher possible upside, analysts plainly believe Bank of Nova Scotia is more favorable than Societe Generale Group.

Summary

Bank of Nova Scotia beats Societe Generale Group on 10 of the 16 factors compared between the two stocks.

About Societe Generale Group

Société Générale Société anonyme provides banking and financial services to individuals, corporates, and institutional clients in Europe and internationally. It operates through French Retail Banking, International Retail Banking & Financial Services, and Global Banking and Investor Solutions. It offers retail banking services, such as consumer credit, vehicle leasing and fleet management, online banking, wealth management, and equipment and vendor finance services; and insurance products, including home, vehicle, family, health, and mortgage insurance. The company also provides corporate and investment banking, securities, business consulting, consumer finance, advisory and financing, and asset management and private banking services. In addition, it offers brokerage, cash management, payment, factoring/reverse factoring, export financing, trade finance, cash clearing and correspondent banking, and receivables and supply chain financing services. Société Générale Société anonyme was incorporated in 1864 and is headquartered in Paris, France.

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.