Five months into the pandemic, the big Canadian banks have shown tremendous progress as dividends stayed safe. Despite record low interest rates and surging unemployment figures throughout fiscal Q2 2020, it appears that the worst is over and the path to recovery is gaining traction.
Banks are a large part of my portfolio, and while that part has been almost hit as hard as the energy sector, I consider the dividends much safer, although I was certainly surprised by the monstrous dividend cut from Wells Fargo (WFC).
There has been a sharp rebound in stock prices, but one Canadian bank, in particular - the Bank of Nova Scotia (NYSE:BNS) - continues to trade at very attractive valuations and is offering a rare, once in a blue moon opportunity.
(Source: PennLive.com)
"Once in a blue moon" is not to be taken literally though, as a blue moon only occurs roughly once every 2.7 years, whereas the opportunity the Bank of Nova Scotia offers right now is even rarer and easily the best within the last 5 years.
What is going on at the Bank of Nova Scotia?
The Bank of Nova Scotia, as part of Canada's illustrious Big Five (the others are Toronto-Dominion Bank (NYSE:TD), Canadian Imperial Bank of Commerce (NYSE:CM), Royal Bank of Canada (NYSE:RY) and Bank of Montreal (NYSE:BMO)), has a history of uninterrupted dividend payments dating back to the year 1833.
It currently trades at a P/E of 10 and a yield around 6.2%. As other financials, the stock sold off heavily in mid- to late-March, before rebounding and staying in a price corridor. The stock remains the worst performer among the Big Five, and the gap has been widening since the bank's prior earnings release.
It is not surprising to see BNS as the laggard here given
