Recent Purchase: Bank of Nova Scotia (BNS)

Purchased Bank of Nova Scotia stock

On January 28th, I purchased 27 shares of Bank of Nova Scotia (TSE: BNS) at $55.30, with a trading cost of $6.95 for a total investment of $1,500.05. BNS pays an annual dividend of $2.80, so my yield-on-cost is 5.06%. I’ve been very lucky to be loading up on high-quality Canadian financial assets this past month which have been pushed down so much due to the early bear market volatility of 2016 that their yields have soared. My new stake in BNS has added $75.60 to my 12-month forward dividend income, averaged out to an increase of $6.30 per month. I very often like to look at how new investments impact my bottom line on a month-to-month basis, because it makes observing improvements in my portfolio much more apparent and is a great motivator in pursuing a higher monthly dividend income. My 12-month forward dividend income has hopped to $1,340.20, averaged out to $111.68 per month.

This purchased allowed me to average down on my holding of BNS. BNS was one of my first stock buys last April, from when I began investing. Back then I purchased 23 shares of BNS at $65.55, and the dividend yield was 4.14% at that time. It’s now yielding en entire 92 basis points more than when I first bought stock. My average cost per share of BNS has been lowered to $60.02; considering my total cost basis on 50 shares is $3,000.75.

Bank of Nova Scotia is now my second largest holding with a market value of $2,869.50 (50 shares). Telus is my #1 largest holding with a market value of $3,897.00 (100 shares).  In third is my stake in Alaris Royalty with a market value of $2,852.40 (120 shares). All of my other stock positions are lower by over $1,000. I plan on taking a hard look at my overall portfolio in the near-term and coming up with an ideal sector allocation.

With January over and my buying spree coming to, if not already at, an end, I hope to be a little more organized. I have yet to top up my TFSA, and would like to figure out what I would like to buy in there since they must be very high-quality assets, unlike what I had bought last year. I’d like to look at the Canadian REIT sector and pick one or two good names to add, I would also like to liquidate some of my holdings once they come back up and reallocate my capital as I made those choices as pure income plays, before I became a dividend growth investor.

Why I Invested in Bank of Nova Scotia

I’ve known that I wanted to add to my BNS position for quite some time now, at least before the upcoming ex-dividend date since I’ve wanted to average down at the time when I was down 20% on my holding. Earlier this week as the Toronto market was recovering fiercely, and my loss was reduced to 17% as the share price was jumping, that’s when I decided I might as well buy now and hope for the best. The end result, of adding new shares and averaging down, plus the added capital appreciation that ensued after purchasing resulted in now holding the shares at a loss of -4.81%, barely anything to be afraid of with the way markets are flying. In fact, five positions that I’ve held at a loss for quite some time now flipped to green in this past week, quite handsomely. I’m overjoyed with the result.

BNS is one of the Big Five canadian banks, and has the second highest yield after Canadian Imperial Bank of Commerce (CIBC) (TSE: CM). I scored the shares at a 5.06% yield this time around, but on Friday’s close BNS yielded 59 basis points lower at 4.47%.

My most recent deep dive into Bank of Nova Scotia stock was when I compared Bank of Nova Scotia (BNS) to Canadian Western Bank (CWB).

The share price has been hammered throughout 2015 due to Bank of Nova Scotia’s high international exposure, and the global economy being far from healthy. I think things will turn around eventually though and that the growth prospects for many of these economies is actually quite healthy, though short-term volatility may make it a little frightening for conservative investors.

Primarily, I’m happy to have been able to average down on a high-quality Canadian financial asset with a high-yield which contributes greatly to my forward dividend income and now accounts for 10% of my dividend stream. I’m also predicting that when they declare the next dividend on March 1st, they will also raise it as you can see the pattern in their table of common share dividends from the Bank of Nova Scotia Investor Relations, which I predict will bode well for the share price.


18 Replies to “Recent Purchase: Bank of Nova Scotia (BNS)”

    1. Hi Justin,

      Glad to hear another investor interested in the same sector currently.
      While I haven’t taken anything near a deep dive into the REIT sector, I’d like to look further into:

      Plaza Retail REIT (PLZ.UN) – I own some of this already and they’ve in increased dividends for 13 years.
      Canadian REIT (REF.UN) – Increased dividends for 14 years, a little hesitant due to inflated housing prices, but a solid streak of raises.

      Apart from those dividend raisers, there’s: HR.UN, REI.UN, and NWH.UN that I have an interest in.

      Hope this list helps push you in some direction for further education!


  1. I might as well be a Canadian as much as I like the Canadian banks stocks. BNS is a great buy while it’s beaten up. That yield is still very safe so there should be no fear of a cut going forward. I like TD and RY as well and feel that the severe headwinds Canada is facing these days is giving us much better buying opportunities with better values and higher yields in some solid names.

    1. Hey DH,

      I’ve seen you speaking out about how much you love the Canadian banks since I started blogging I believe. It’s great that my country has some investing opportunities for you, but you definitely want to stay American for the next bit as your currency allows you to stock up BIG TIME on Canadian stocks and make humongous profits when our dollar goes back up.

      So many opportunities in the banking sector…


    1. Hey Landlord,

      We all have our own ways and strategies of investing. I chose DGI because it made me feel safer and less likely to sell at a loss since I am receiving income all through out. I can definitely see the couch potato strategy really working out for someone too.

      Do you really think negative rates would kill bank dividends? I can’t imagine it going so far, as people would probably put money in their brokerages and a lot of people have their bank’s brokerages as far as I’ve seen. I’m sure the bank will still make their money passing off the rates (taking more money off the top of the overnight rate) through to the clients.

      Thanks for commenting,

    1. Hi Tristan,

      It is a good time to be loading up. I’d like to buy a lot more but not sure how overweight I want to go. Have to take a look at my sector allocation and make some decisions.

      Thanks for commenting,

  2. Nice buy DB…Canadian banks have been very popular lately! Can’t blame all the DGI investors out there picking up shares, at current prices and yields, they look like very attractive long term plays. We’ve been adding shares ourselves!

    Thanks for sharing, Best wishes and continued success! AFFJ

    1. Hey AFFJ,

      I can’t look in any direction without seeing Canadian bank buys. Plan on continuing it throughout February, let’s see where it goes from here! Exciting times to be an investor, but when isn’t it?


    1. Hi SAD,

      I agree with you that it’s attractively priced, a lot of the Canadian banks are right now. BNS has a huge yield and it’s great to collect that dividend. I’m totally full on my position now though. Let me know when you add some more.


  3. I am quite happy to be holding BNS, and would like to buy more. Especially considering it is down about 12% on my current average cost basis 🙂

    It is also on my next watchlist for stocks to buy. Always so hard to choose!
    Thanks for sharing!

    1. Hey DW,

      You and me both buddy. I’m down now about 5% or 6%, so I’m good here… Probably wouldn’t add unless I was down another 20% or so. I agree with you… So many choices, so little capital.


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