Bank of Nova Scotia (BNS 0.15%), more commonly known as Scotiabank, has paid a dividend every single year since 1833. Think about that for one second as you read this in 2025. This Canadian banking giant has reliably paid dividends for nearly 200 years. Currently, the yield is an attractive 4.7%, or so.
Here are three reasons you might want to buy this high-yield bank stock like there's no tomorrow.
1. Scotiabank's yield is super attractive
The average large U.S. bank has a dividend yield of just 2.4%, as indicated by SPDR S&P Bank ETF, which serves as an industry proxy. Even if you focus on just smaller regional banks, which can be riskier investments, the average yield is only 2.5%, using SPDR S&P Regional Banking ETF as a proxy. By this standard, Scotiabank's 4.7% yield is extremely attractive.
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But it's even attractive relative to other large Canadian banks. For example, Toronto-Dominion Bank's dividend yield is 3.7%. Bank of Montreal's yield is also 3.7%. Canadian Imperial Bank of Commerce's yield is 3.2%. And Royal Bank of Canada's is 3%. Those four banks are Scotiabank's primary competitors in Canada.
Basically, if you are looking for a high-yield bank stock, Bank of Nova Scotia looks like the one you'll want to dig into first. That said, all of the Canadian banks share some important features.
2. Canadian banks are conservative by nature
The Canadian banking industry is highly regulated. There are two key benefits from this fact. The first is that the largest banks have effectively been granted protected market positions. Bank mergers and acquisitions are strictly controlled, so smaller companies building themselves up aren't likely. And even the largest companies are unlikely to achieve industry dominance through mergers. Scotiabank, like its four Canadian peers, is an entrenched industry leader.
However, the strong industry positioning comes with what could be viewed as a negative aspect: heavy regulation. Only this, too, could be framed as a positive by shareholders. Because there's so much regulation, Canadian banks are generally operated in a very conservative manner. Risk-taking is not particularly common. That's not to suggest that companies don't make mistakes, but even when strategic errors do occur, they don't tend to be a huge threat to the overall bank.
So, like its peers, Scotiabank is a fairly low-risk bank to own with a large and reliable dividend. But management did make a mistake, which it is now working to correct with a turnaround effort.
NYSE: BNS
Key Data Points
3. Scotiabank is getting back on track
Most of Scotiabank's Canadian peers chose to expand into the U.S. market as they looked to grow their businesses. Scotiabank attempted to differentiate itself by bypassing the United States and instead focusing on Central and South America. The hope was that the developing economies would lead to stronger long-term growth opportunities. It didn't pan out as hoped because of the economic and political volatility of the regions.
Scotiabank has returned to the drawing board, shifting its focus away from less desirable markets and concentrating on providing contiguous service from Mexico to Canada. That has necessitated an increasing refocus on the U.S. market. Although the bank has made material progress, this isn't a one- or two-year process. It will likely take five to 10 years to fully unfold. But given the dividend history and Canadian banking regulations, this is a very low-risk turnaround story.
Even the most conservative dividend investors should feel pretty comfortable owning Scotiabank. In fact, 2025 offered an important, tangible statement from the company on the process. In 2024, as the turnaround process began, the board of directors decided to maintain the dividend at the same level as in 2023. In 2025, after just one year, the annual dividend was increased, hinting strongly that the company is confident in its progress.
Buy Scotiabank while it's still on sale
To sum it all up, Bank of Nova Scotia is a high-yield bank with a solid foundation that is working to improve its business and has already signaled that it has made notable progress. Wall Street will likely get increasingly comfortable with Scotiabank's turnaround as it progresses. A higher stock price and lower yield seem highly likely over time. If you buy now, instead of waiting for some distant tomorrow, you'll lock in the high yield.
