Top Performing High-Dividend Bank Stock Worthy of a $10,000 Investment Immediately
In a bold move to reposition itself in the global banking landscape, Bank of Nova Scotia (Scotiabank) has announced a strategic shift that aims to reduce its exposure in less desirable markets, particularly in Central and South America, and increase its presence in more attractive markets such as the United States, Mexico, and Canada.
A key component of this strategy is Scotiabank's acquisition of a significant stake (approximately 15%) in KeyCorp, a U.S.-based bank, signaling a strong push into the U.S. market. The bank also emphasizes geographic prioritization, funding base enhancement, and improving productivity ratios to free up capacity for further investment.
Moreover, Scotiabank has integrated sustainability and ESG (Environmental, Social, and Governance) goals comprehensively, aiming towards net-zero carbon targets and mobilizing significant climate-related funding.
This strategic overhaul has had a notable impact on Scotiabank's dividend yield. Although the bank temporarily paused dividend growth as part of this restructuring effort, it still offers a high dividend yield of approximately 5.7%, which is significantly above the average bank yield of around 2.5%. This high dividend yield compensates investors during the turnaround phase and signals confidence in the bank’s long-term financial stability.
The dividend growth pause reflects caution amid the transformation and market repositioning, aiming to balance capital allocation between growth investments and shareholder returns.
Scotiabank's solid business foundation, as evidenced by its continuous dividend payments since 1833, with only a few instances where the dividend did not increase, adds to the confidence in this strategic move. The bank did not cut its dividend during the 2007 to 2009 financial crisis, while banks like Citigroup and Bank of America did.
For investors, an investment in Scotiabank offers a well-above-market dividend yield, supported by a conservatively run bank. A $10,000 investment today will get a dividend investor approximately 175 shares of the bank.
Scotiabank competes with large banks like Bank of America and Citigroup, but also with local banks due to its diverse range of services. The bank operates mainly in Canada, where banking regulations are stringent, leading to a conservative business ethos. Scotiabank's stock ticker symbol is BNS.
Notably, Scotiabank started increasing its dividend again in 2025, signaling the bank's successful navigation of the transformation phase. The bank's current focus is on becoming a leading Mexico to Canada bank and bulking up its business in the United States.
Investors considering Scotiabank as part of their portfolio can view it as a low-risk turnaround story, offering a high dividend yield that is well above market and peer averages. The financial index used for comparison is the S&P 500, with Scotiabank's dividend yield currently standing at 5.7%, significantly higher than the S&P 500's 1.2% and the average bank's 2.5%.
In summary, Scotiabank's strategic overhaul, driven by geographic refocusing and sustainable investment, is driving a cautious but confident stance on dividends, maintaining a strong yield but suspending growth temporarily to support its strategic transformation.
Investors looking to expand their portfolio may find Scotiabank an attractive choice due to its high dividend yield, which is currently at approximately 5.7%. This yield is significantly higher than the S&P 500's 1.2% and the average bank's 2.5%, showcasing Scotiabank's focus on both sustainability and finance, as evidenced by its investments in KeyCorp and its commitment to ESG goals. Furthermore, Scotiabank's strategic shift, involving geographic prioritization and productivity ratio improvements, suggests a long-term investment opportunity, despite the temporary pause in dividend growth.
