Canadian dividend investors who missed the rally this year are searching for stocks that might still be undervalued and good to buy heading into 2025.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) trades near $73.50 at the time of writing compared to $93 at the high point in 2022 and a low of around $55 in late October last year.
Banks typically benefit when interest rates rise. However, the steep increase that occurred in 2022 and 2023 caught many businesses and households by surprise. Those with too much debt have struggled to cover the increase in interest expenses, and this has led to a rise in provisions for credit losses (PCL) at Bank of Nova Scotia and its peers. Now that interest rates are in decline, there should be some relief on the horizon for borrowers, although many Canadians who bought homes in 2020 at rock-bottom rates and took five-year fixed-rate mortgages will still face higher rates on renewal next year.
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