TSX:NA

Stock Analysis Report

National Bank of Canada

Executive Summary

National Bank of Canada provides various financial products and services to retail, commercial, corporate, and institutional clients in Canada and internationally.


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has National Bank of Canada's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NA's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.0%

NA

-0.9%

CA Banks

2.1%

CA Market


1 Year Return

-13.8%

NA

-20.9%

CA Banks

-21.2%

CA Market

Return vs Industry: NA exceeded the Canadian Banks industry which returned -21.1% over the past year.

Return vs Market: NA exceeded the Canadian Market which returned -22.9% over the past year.


Shareholder returns

NAIndustryMarket
7 Day-2.0%-0.9%2.1%
30 Day-14.4%-12.2%-13.8%
90 Day-25.9%-21.8%-21.9%
1 Year-9.9%-13.8%-17.5%-20.9%-18.6%-21.2%
3 Year9.2%-3.7%-7.7%-18.2%-11.0%-19.3%
5 Year39.4%12.1%20.6%-1.6%1.6%-13.6%

Price Volatility Vs. Market

How volatile is National Bank of Canada's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is National Bank of Canada undervalued compared to its fair value and its price relative to the market?

40.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NA (CA$53.3) is trading below our estimate of fair value (CA$88.94)

Significantly Below Fair Value: NA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NA is poor value based on its PE Ratio (8.1x) compared to the Banks industry average (8.1x).

PE vs Market: NA is good value based on its PE Ratio (8.1x) compared to the Canadian market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: NA's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: NA is overvalued based on its PB Ratio (1.4x) compared to the CA Banks industry average (1x).


Next Steps

Future Growth

How is National Bank of Canada forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

-2.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NA's earnings are forecast to decline over the next 3 years (-2.6% per year).

Earnings vs Market: NA's earnings are forecast to decline over the next 3 years (-2.6% per year).

High Growth Earnings: NA's earnings are forecast to decline over the next 3 years.

Revenue vs Market: NA's revenue (2.8% per year) is forecast to grow slower than the Canadian market (3.3% per year).

High Growth Revenue: NA's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NA's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has National Bank of Canada performed over the past 5 years?

11.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NA has high quality earnings.

Growing Profit Margin: NA's current net profit margins (30.5%) are higher than last year (29.9%).


Past Earnings Growth Analysis

Earnings Trend: NA's earnings have grown by 11.7% per year over the past 5 years.

Accelerating Growth: NA's earnings growth over the past year (7.6%) is below its 5-year average (11.7% per year).

Earnings vs Industry: NA earnings growth over the past year (7.6%) exceeded the Banks industry 5.3%.


Return on Equity

High ROE: NA's Return on Equity (15.4%) is considered low.


Next Steps

Financial Health

How is National Bank of Canada's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: NA's level of assets compared to its equity is moderate.

Allowance for Bad Loans: NA has a sufficient allowance for bad loans.

Low Risk Liabilities: NA's liabilities are made up of primarily low risk sources of funding.

Loan Level: NA has an acceptable proportion of non-loan assets held.

Low Risk Deposits: NA's loans are broadly funded by customer deposits.

Level of Bad Loans: NA has an appropriate level of bad loans (0.45%)


Next Steps

Dividend

What is National Bank of Canada's current dividend yield, its reliability and sustainability?

5.33%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NA's dividend (5.33%) is higher than the bottom 25% of dividend payers in the Canadian market (2.68%).

High Dividend: NA's dividend (5.33%) is low compared to the top 25% of dividend payers in the Canadian market (8.42%).


Stability and Growth of Payments

Stable Dividend: NA's dividends per share have been stable in the past 10 years.

Growing Dividend: NA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (41.4%), NA's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NA's dividends in 3 years are forecast to be well covered by earnings (48.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.3yrs

Average management tenure


CEO

Louis Vachon (56yo)

12.83s

Tenure

CA$8,393,870

Compensation

Mr. Louis Vachon, CFA, has been Chief Executive Officer and President at National Bank of Canada since June 01, 2007 and served as its Chief Operating Officer from August 01, 2006 to June 01, 2007. Mr. Vac ...


CEO Compensation Analysis

Compensation vs Market: Louis's total compensation ($USD5.93M) is about average for companies of similar size in the Canadian market ($USD6.63M).

Compensation vs Earnings: Louis's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Louis Vachon
President12.83yrsCA$8.39m0.082% CA$14.7m
Ghislain Parent
CFO & Executive VP of Finance8.67yrsCA$2.26m0.0018% CA$320.4k
Martin Gagnon
Executive VP of Wealth Management & Co-President and Co-CEO of National Bank Financial9.25yrsCA$2.95m0.0041% CA$737.5k
Denis Girouard
Chief Transformation Officer3.83yrsCA$5.91m0.0060% CA$1.1m
Laurent Ferreira
Chief Transformation Officerno dataCA$5.83m0.014% CA$2.5m
Nathalie Généreux
Executive Vice-President of Operations1.25yrsno data0.00015% CA$26.9k
Manuel Morales
Chief Scientist of Artificial Intelligence1.92yrsno datano data
Linda Boulanger
Vice President of Investor Relationsno datano datano data
Nicole Rondou
Vice President of Complianceno datano datano data
Dominic Paradis
Senior VP of Legal Affairs & Corporate Secretaryno datano datano data

6.3yrs

Average Tenure

Experienced Management: NA's management team is seasoned and experienced (6.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Louis Vachon
President12.83yrsCA$8.39m0.082% CA$14.7m
Pierre Boivin
Independent Director7yrsCA$172.21k0.0044% CA$794.8k
Lino Saputo
Independent Director8yrsCA$167.99k0.011% CA$2.0m
Maryse Bertrand
Independent Director8yrsCA$198.99k0.0034% CA$606.9k
Karen Kinsley
Independent Director5.33yrsCA$180.00k0.0027% CA$483.3k
Patricia Curadeau-Grou
Independent Director1yrCA$72.75k0.0064% CA$1.1m
Jean Houde
Independent Chairman of the Board6yrsCA$365.00k0.0045% CA$803.8k
Raymond Bachand
Independent Director5.5yrsCA$155.00k0.00063% CA$112.8k
Pierre Thabet
Independent Director9.08yrsCA$173.37k0.11% CA$20.0m
Gillian Denham
Independent Director9.5yrsCA$140.00k0.0040% CA$710.7k

7.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: NA's board of directors are considered experienced (7.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NA insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

National Bank of Canada's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: National Bank of Canada
  • Ticker: NA
  • Exchange: TSX
  • Founded: 1859
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: CA$17.901b
  • Shares outstanding: 335.86m
  • Website: https://www.nbc.ca

Number of Employees


Location

  • National Bank of Canada
  • National Bank Tower
  • 4th Floor
  • Montreal
  • Quebec
  • H3B 4L2
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NATSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 1980
NBCDB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 1980
NTIO.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDFeb 1980
NA.PRSTSX (The Toronto Stock Exchange)1ST PFD SER 30CACADFeb 2014
NA.PRATSX (The Toronto Stock Exchange)1ST PFD SER 36CACADJun 2016
NA.PR.CTSX (The Toronto Stock Exchange)1ST PFD SHS 38CACADJun 2017
NA.PRETSX (The Toronto Stock Exchange)5Y PFD 40 NVCCCACADJan 2018
NA.PRGTSX (The Toronto Stock Exchange)NCUM PFD SH 42CACADJun 2018

Biography

National Bank of Canada provides various financial products and services to retail, commercial, corporate, and institutional clients in Canada and internationally. It operates through four segments; Personal and Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance and International. The Personal and Commercial segment offers personal banking services, including transaction solutions, mortgage loans and home equity lines of credit, consumer loans, payment solutions, savings and investment solutions; various insurance products; and commercial banking services, such as credit, and deposit and investment solutions, as well as international trade, foreign exchange transactions, payroll, cash management, insurance, electronic transactions, and complementary services. The Wealth Management segment provides investment solutions, trust services, banking services, lending services, and other wealth management solutions through internal and third-party distribution networks. The Financial Markets segment offers risk management products and services; and debt and equity underwriting; advisory services in the areas of mergers and acquisitions, and financing. The U.S. Specialty Finance and International segments provides specialty finance expertise; financial products and services to individuals and businesses in Cambodia; and the activities of targeted investments in certain emerging markets. It provides its services through a network of 495 branches and 1,480 banking machines. The company was founded in 1859 and is headquartered in Montreal, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 02:34
End of Day Share Price2020/04/06 00:00
Earnings2020/01/31
Annual Earnings2019/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.