TSX:NA

Stock Analysis Report

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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. More Details


Snowflake Analysis

Excellent 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 is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: NA's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

4.0%

NA

3.0%

CA Banks

2.7%

CA Market


1 Year Return

3.3%

NA

-5.5%

CA Banks

0.5%

CA Market

Return vs Industry: NA exceeded the Canadian Banks industry which returned -5.4% over the past year.

Return vs Market: NA exceeded the Canadian Market which returned 0.5% over the past year.


Shareholder returns

NAIndustryMarket
7 Day4.0%3.0%2.7%
30 Day15.7%17.7%12.3%
90 Day2.8%9.2%6.1%
1 Year8.1%3.3%-0.5%-5.5%4.2%0.5%
3 Year31.0%15.3%10.0%-3.8%12.8%1.9%
5 Year110.9%69.7%57.6%27.2%49.7%26.8%

Long-Term 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?

1.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NA (CA$73.48) is trading below our estimate of fair value (CA$74.57)

Significantly Below Fair Value: NA is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: NA is good value based on its PE Ratio (12.2x) compared to the CA Banks industry average (12.9x).

PE vs Market: NA is good value based on its PE Ratio (12.2x) compared to the Canadian market (15.6x).


Price to Earnings Growth Ratio

PEG Ratio: NA is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: NA is overvalued based on its PB Ratio (1.9x) compared to the CA Banks industry average (1.2x).


Next Steps

Future Growth

How is National Bank of Canada forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

5.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NA's forecast earnings growth (5.3% per year) is above the savings rate (1.7%).

Earnings vs Market: NA's earnings (5.3% per year) are forecast to grow slower than the Canadian market (26.3% per year).

High Growth Earnings: NA's earnings are forecast to grow, but not significantly.

Revenue vs Market: NA's revenue (3.6% per year) is forecast to grow slower than the Canadian market (6.2% per year).

High Growth Revenue: NA's revenue (3.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NA's Return on Equity is forecast to be low in 3 years time (14.8%).


Next Steps

Past Performance

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

11.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NA has high quality earnings.

Growing Profit Margin: NA's current net profit margins (28.9%) are lower than last year (30%).


Past Earnings Growth Analysis

Earnings Trend: NA's earnings have grown by 11.6% per year over the past 5 years.

Accelerating Growth: NA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NA had negative earnings growth (-3.5%) over the past year, making it difficult to compare to the Banks industry average (-14.8%).


Return on Equity

High ROE: NA's Return on Equity (14.2%) 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 Assets to Equity ratio (20.8x) is very high.

Allowance for Bad Loans: NA has a sufficient allowance for bad loans (140%).

Low Risk Liabilities: 67% of NA's liabilities are made up of primarily low risk sources of funding.

Loan Level: NA has an appropriate level of Loans to Assets ratio (48%).

Low Risk Deposits: NA's Loans to Deposits ratio (75%) is appropriate.

Level of Bad Loans: NA has an appropriate level of bad loans (0.5%).


Next Steps

Dividend

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

3.86%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NA's dividend (3.86%) is higher than the bottom 25% of dividend payers in the Canadian market (1.62%).

High Dividend: NA's dividend (3.86%) is low compared to the top 25% of dividend payers in the Canadian market (5.26%).


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 (46.5%), 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 (43.2% payout ratio).


Next Steps

Management

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

4.4yrs

Average management tenure


CEO

Louis Vachon (57 yo)

13.42yrs

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 ($USD6.47M) is about average for companies of similar size in the Canadian market ($USD7.04M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Louis Vachon
President13.42yrsCA$8.39m0.082%
CA$ 20.3m
Ghislain Parent
CFO & Executive VP of Finance9.25yrsCA$2.26m0.0018%
CA$ 441.9k
Martin Gagnon
Executive VP of Wealth Management & Co-President and Co-CEO of National Bank Financial9.83yrsCA$2.95m0.0041%
CA$ 1.0m
Denis Girouard
Executive VP & Co-Head of Financial Markets4.42yrsCA$5.91m0.0089%
CA$ 2.2m
Laurent Ferreira
Chief Transformation Officerno dataCA$5.83m0.014%
CA$ 3.4m
Nathalie Généreux
Executive Vice-President of Operations1.83yrsno data0.00015%
CA$ 37.0k
Julie Lévesque
Executive Vice President of Information Technology0.42yrno data0.000030%
CA$ 7.4k
Manuel Morales
Chief Scientist of Artificial Intelligence2.5yrsno 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
Claude Breton
Vice-President of Communications & Corporate Social Responsibilityno datano datano data

4.4yrs

Average Tenure

Experienced Management: NA's management team is considered experienced (4.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Louis Vachon
President13.42yrsCA$8.39m0.082%
CA$ 20.3m
Pierre Boivin
Independent Director7.58yrsCA$172.21k0.0051%
CA$ 1.3m
Pierre Blouin
Independent Director4.17yrsCA$155.00kno data
Lino Saputo
Independent Director8.58yrsCA$167.99k0.011%
CA$ 2.8m
Maryse Bertrand
Independent Director8.58yrsCA$198.99k0.0034%
CA$ 846.8k
Karen Kinsley
Independent Director5.92yrsCA$180.00k0.0027%
CA$ 666.6k
Patricia Curadeau-Grou
Independent Director1.58yrsCA$72.75k0.0064%
CA$ 1.6m
Jean Houde
Independent Chairman of the Board6.58yrsCA$365.00k0.0045%
CA$ 1.1m
Raymond Bachand
Independent Director6.08yrsCA$155.00k0.00078%
CA$ 192.6k
Pierre Thabet
Independent Director9.67yrsCA$173.37k0.10%
CA$ 25.4m
Andrée Savoie
Independent Director5.58yrsCA$155.00k0.0010%
CA$ 246.9k
Rebecca McKillican
Independent Director3.08yrsCA$140.00kno data

6.3yrs

Average Tenure

62yo

Average Age

Experienced Board: NA's board of directors are considered experienced (6.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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$24.687b
  • Shares outstanding: 335.97m
  • 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 CONV PFD 36CACADJun 2016
NA.PRCTSX (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; Person...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/29 00:19
End of Day Share Price2020/11/27 00:00
Earnings2020/07/31
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.