Comprehensive Stock Comparison
Compare The Bank of Nova Scotia (BNS) vs Royal Bank of Canada (RY) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | BNS | 148.2% revenue growth vs RY's 2.1% |
| Value | RY | PEG 0.85 vs 6.49 |
| Quality / Margins | RY | 14.8% net margin vs BNS's 10.6% |
| Stability / Safety | BNS | Beta 0.39 vs RY's 0.56, lower leverage |
| Dividends | BNS | 4.2% yield, 1-year raise streak, vs RY's 2.7% |
| Momentum (1Y) | BNS | +58.9% vs RY's +45.3% |
| Efficiency (ROA) | RY | 0.9% ROA vs BNS's 0.5%, ROIC 2.0% vs 1.6% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
The Bank of Nova Scotia is a major Canadian multinational bank providing retail, commercial, and investment banking services across Canada and international markets. It generates revenue primarily through net interest income from lending activities (about 60% of total revenue) and non-interest income from wealth management, capital markets, and transaction fees. Its key competitive advantage is its extensive international banking network across Latin America and the Caribbean—often called the "Pacific Alliance" strategy—which provides geographic diversification and growth opportunities beyond the mature Canadian market.
Royal Bank of Canada is a diversified financial services institution operating primarily in Canada and internationally. It generates revenue mainly through personal and commercial banking (roughly 50% of earnings), wealth management, capital markets, and insurance services. The bank's competitive advantage lies in its dominant Canadian retail banking franchise — the largest in the country — supported by extensive branch networks and long-standing customer relationships.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Segment breakdown not available.
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
RY leads in 4 of 6 categories (Financial Metrics, Valuation Metrics). BNS leads in 1 (Risk & Volatility). 1 tied.
Financial Metrics (TTM)
RY is the larger business by revenue, generating $137.4B annually — 1.9x BNS's $73.2B. Profitability is closely matched — net margins range from 14.8% (RY) to 10.6% (BNS).
| Metric | BNSThe Bank of Nova … | RYRoyal Bank of Can… |
|---|---|---|
| RevenueTrailing 12 months | $73.2B | $137.4B |
| EBITDAEarnings before interest/tax | $12.1B | $28.7B |
| Net IncomeAfter-tax profit | $7.8B | $20.4B |
| Free Cash FlowCash after capex | $5.1B | $53.0B |
| Gross MarginGross profit ÷ Revenue | +44.3% | +45.3% |
| Operating MarginEBIT ÷ Revenue | +14.4% | +18.7% |
| Net MarginNet income ÷ Revenue | +10.6% | +14.8% |
| FCF MarginFCF ÷ Revenue | +6.9% | +38.6% |
| Rev. Growth (YoY)Latest quarter vs prior year | — | — |
| EPS Growth (YoY)Latest quarter vs prior year | +35.2% | +28.9% |
Valuation Metrics
At 16.2x trailing earnings, RY trades at a 11% valuation discount to BNS's 18.2x P/E. Adjusting for growth (PEG ratio), RY offers better value at 1.30x vs BNS's 12.74x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | BNSThe Bank of Nova … | RYRoyal Bank of Can… |
|---|---|---|
| Market CapShares × price | $93.7B | $234.2B |
| Enterprise ValueMkt cap + debt − cash | $413.7B | $780.4B |
| Trailing P/EPrice ÷ TTM EPS | 18.22x | 16.24x |
| Forward P/EPrice ÷ next-FY EPS est. | 9.29x | 10.58x |
| PEG RatioP/E ÷ EPS growth rate | 12.74x | 1.30x |
| EV / EBITDAEnterprise value multiple | 46.74x | 37.17x |
| Price / SalesMarket cap ÷ Revenue | 1.75x | 2.33x |
| Price / BookPrice ÷ Book value/share | 1.46x | 2.32x |
| Price / FCFMarket cap ÷ FCF | 25.33x | 6.05x |
Profitability & Efficiency
RY delivers a 14.6% return on equity — every $100 of shareholder capital generates $15 in annual profit, vs $9 for BNS. BNS carries lower financial leverage with a 5.69x debt-to-equity ratio, signaling a more conservative balance sheet compared to RY's 6.00x. On the Piotroski fundamental quality scale (0–9), RY scores 6/9 vs BNS's 3/9, reflecting solid financial health.
| Metric | BNSThe Bank of Nova … | RYRoyal Bank of Can… |
|---|---|---|
| ROE (TTM)Return on equity | +8.8% | +14.6% |
| ROA (TTM)Return on assets | +0.5% | +0.9% |
| ROICReturn on invested capital | +1.6% | +2.0% |
| ROCEReturn on capital employed | +1.9% | +3.5% |
| Piotroski ScoreFundamental quality 0–9 | 3 | 6 |
| Debt / EquityFinancial leverage | 5.69x | 6.00x |
| Net DebtTotal debt minus cash | $438.1B | $747.6B |
| Cash & Equiv.Liquid assets | $66.0B | $87.4B |
| Total DebtShort + long-term debt | $504.0B | $835.0B |
| Interest CoverageEBIT ÷ Interest expense | 0.28x | 0.36x |
Total Returns (with DRIP)
A $10,000 investment in RY five years ago would be worth $21,571 today (with dividends reinvested), compared to $15,258 for BNS. Over the past 12 months, BNS leads with a +58.9% total return vs RY's +45.3%. The 3-year compound annual growth rate (CAGR) favors RY at 21.0% vs BNS's 19.8% — a key indicator of consistent wealth creation.
| Metric | BNSThe Bank of Nova … | RYRoyal Bank of Can… |
|---|---|---|
| YTD ReturnYear-to-date | +2.7% | -1.4% |
| 1-Year ReturnPast 12 months | +58.9% | +45.3% |
| 3-Year ReturnCumulative with dividends | +72.0% | +77.2% |
| 5-Year ReturnCumulative with dividends | +52.6% | +115.7% |
| 10-Year ReturnCumulative with dividends | +159.2% | +295.9% |
| CAGR (3Y)Annualised 3-year return | +19.8% | +21.0% |
Risk & Volatility
BNS is the less volatile stock with a 0.39 beta — it tends to amplify market swings less than RY's 0.56 beta. A beta below 1.0 means the stock typically moves less than the S&P 500.
| Metric | BNSThe Bank of Nova … | RYRoyal Bank of Can… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.39x | 0.56x |
| 52-Week HighHighest price in past year | $78.28 | $176.19 |
| 52-Week LowLowest price in past year | $44.09 | $106.10 |
| % of 52W HighCurrent price vs 52-week peak | +96.8% | +94.9% |
| RSI (14)Momentum oscillator 0–100 | 57.2 | 49.2 |
| Avg Volume (50D)Average daily shares traded | 1.7M | 1.2M |
Analyst Outlook
Wall Street rates BNS as "Buy" and RY as "Hold". Consensus price targets imply -4.8% upside for BNS (target: $72) vs -25.3% for RY (target: $125). For income investors, BNS offers the higher dividend yield at 4.16% vs RY's 2.73%.
| Metric | BNSThe Bank of Nova … | RYRoyal Bank of Can… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Hold |
| Price TargetConsensus 12-month target | $72.15 | $124.85 |
| # AnalystsCovering analysts | 19 | 29 |
| Dividend YieldAnnual dividend ÷ price | +4.2% | +2.7% |
| Dividend StreakConsecutive years of raises | 1 | 2 |
| Dividend / ShareAnnual DPS | $4.31 | $6.24 |
| Buyback YieldShare repurchases ÷ mkt cap | +0.7% | +4.2% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| The Bank of Nova Sc… (BNS) | 100 | 142.07 | +42.1% |
| Royal Bank of Canada (RY) | 100 | 219.72 | +119.7% |
Royal Bank of Canada (RY) returned +116% over 5 years vs The Bank of Nova Sc… (BNS)'s +53%. A $10,000 investment in RY 5 years ago would be worth $21,571 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| The Bank of Nova Sc… (BNS) | $25.9B | $73.2B | +182.1% |
| Royal Bank of Canada (RY) | $46.0B | $137.4B | +198.7% |
The Bank of Nova Scotia's revenue grew from $25.9B (2016) to $73.2B (2025) — a 12.2% CAGR. Royal Bank of Canada's revenue grew from $46.0B (2016) to $137.4B (2025) — a 12.9% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| The Bank of Nova Sc… (BNS) | 27.4% | 10.6% | -61.2% |
| Royal Bank of Canada (RY) | 22.6% | 14.8% | -34.5% |
The Bank of Nova Scotia's net margin went from 27% (2016) to 11% (2025). Royal Bank of Canada's net margin went from 23% (2016) to 15% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| The Bank of Nova Sc… (BNS) | 9.9 | 13 | +31.3% |
| Royal Bank of Canada (RY) | 10.8 | 12.1 | +12.0% |
The Bank of Nova Scotia has traded in a 6x–13x P/E range over 9 years; current trailing P/E is ~18x. Royal Bank of Canada has traded in a 8x–12x P/E range over 9 years; current trailing P/E is ~16x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| The Bank of Nova Sc… (BNS) | 5.77 | 5.69 | -1.4% |
| Royal Bank of Canada (RY) | 6.78 | 14.09 | +107.8% |
The Bank of Nova Scotia's EPS grew from $5.77 (2016) to $5.69 (2025) — a -0% CAGR. Royal Bank of Canada's EPS grew from $6.78 (2016) to $14.09 (2025) — a 8% CAGR.
Chart 6Free Cash Flow — 5 Years
The Bank of Nova Scotia generated $5B FCF in 2025 (+138% vs 2021). Royal Bank of Canada generated $53B FCF in 2025 (-10% vs 2021).
BNS vs RY: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is BNS or RY a better buy right now?
Royal Bank of Canada (RY) offers the better valuation at 16.2x trailing P/E (10.6x forward), making it the more compelling value choice. Analysts rate The Bank of Nova Scotia (BNS) a "Buy" — based on 19 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — BNS or RY?
On trailing P/E, Royal Bank of Canada (RY) is the cheapest at 16.2x versus The Bank of Nova Scotia at 18.2x. On forward P/E, The Bank of Nova Scotia is actually cheaper at 9.3x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Royal Bank of Canada wins at 0.85x versus The Bank of Nova Scotia's 6.49x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — BNS or RY?
Over the past 5 years, Royal Bank of Canada (RY) delivered a total return of +115.7%, compared to +52.6% for The Bank of Nova Scotia (BNS). A $10,000 investment in RY five years ago would be worth approximately $22K today (assuming dividends reinvested). Over 10 years, the gap is even starker: RY returned +295.9% versus BNS's +159.2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — BNS or RY?
By beta (market sensitivity over 5 years), The Bank of Nova Scotia (BNS) is the lower-risk stock at 0.39β versus Royal Bank of Canada's 0.56β — meaning RY is approximately 42% more volatile than BNS relative to the S&P 500. On balance sheet safety, The Bank of Nova Scotia (BNS) carries a lower debt/equity ratio of 6% versus 6% for Royal Bank of Canada — giving it more financial flexibility in a downturn.
05Which has better profit margins — BNS or RY?
Royal Bank of Canada (RY) is the more profitable company, earning 14.8% net margin versus 10.6% for The Bank of Nova Scotia — meaning it keeps 14.8% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: RY leads at 18.7% versus 14.4% for BNS. At the gross margin level — before operating expenses — RY leads at 45.3%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is BNS or RY more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Royal Bank of Canada (RY) is the more undervalued stock at a PEG of 0.85x versus The Bank of Nova Scotia's 6.49x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, The Bank of Nova Scotia (BNS) trades at 9.3x forward P/E versus 10.6x for Royal Bank of Canada — 1.3x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for BNS: -4.8% to $72.15.
07Which pays a better dividend — BNS or RY?
All stocks in this comparison pay dividends. The Bank of Nova Scotia (BNS) offers the highest yield at 4.2%, versus 2.7% for Royal Bank of Canada (RY).
08Is BNS or RY better for a retirement portfolio?
For long-horizon retirement investors, The Bank of Nova Scotia (BNS) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.39), 4.2% yield, +159.2% 10Y return). Both have compounded well over 10 years (BNS: +159.2%, RY: +295.9%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between BNS and RY?
Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. In terms of investment character: BNS is a mid-cap income-oriented stock; RY is a large-cap deep-value stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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