Q: I own both and looking to add only to one at this time. Which to add for total return over 3-5 years? Yield on BNS is enticing currently, but exposure to Central America economies leaves me feeling it's riskier than TD with US exposure. What say you guys?
5i Research Answer:
TD is larger than BNS at a $101B market cap versus BNS at $49B. Over the past 10 years, TD has a total return of ~144%, whereas BNS has returned ~46%. TD's concentration in the US has helped it to grow faster than BNS and BNS' international exposure has provided it with diversification, but it has been at a slower growth rate than TD in recent years. We continue to like both names, and we like BNS for its geographic diversification, especially amongst other Canadian banks which do not have as large of a presence internationally. For total return over 3-5 years, we would give TD the slight edge today, however, we feel BNS' strength lies in its geographic diversification.