Canon SX420 IS has a
20.0MP 1/2.3 (6.17 x 4.55 mm ) sized CCD sensor and features DIGIC 4+ processor. On the other hand, Nikon D3500 has a
24.0MP APS-C (23.5 x 15.6 mm ) sized CMOS sensor and features Expeed 4 processor.
One other difference between these two cameras that is worth mentioning is that Nikon D3500's sensor doesn't have an anti-alias (Low-Pass) filter. Removing anti-alias filter increases the sharpness and level of detail but at the same time, it increases the chance of moiré occurring in certain scenes.
Below you can see the SX420 IS and D3500 sensor size comparison.
As seen above, Nikon D3500 has a 13.1x Larger sensor area than Canon SX420 IS. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.