The Toronto-Dominion Bank (NYSE:TD) and Bank of Montreal (NYSE:BMO) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for The Toronto-Dominion Bank and Bank of Montreal, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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The Toronto-Dominion Bank | 4 | 5 | 2 | 0 | 1.82 |
Bank of Montreal | 1 | 3 | 6 | 0 | 2.50 |
The Toronto-Dominion Bank presently has a consensus price target of $76.8182, indicating a potential upside of 22.28%. Bank of Montreal has a consensus price target of $94.1875, indicating a potential upside of 10.35%. Given The Toronto-Dominion Bank's higher probable upside, equities analysts plainly believe The Toronto-Dominion Bank is more favorable than Bank of Montreal.
Volatility & Risk
The Toronto-Dominion Bank has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Bank of Montreal has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.
Institutional and Insider Ownership
48.0% of The Toronto-Dominion Bank shares are owned by institutional investors. Comparatively, 39.2% of Bank of Montreal shares are owned by institutional investors. 1.0% of Bank of Montreal shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Dividends
The Toronto-Dominion Bank pays an annual dividend of $2.48 per share and has a dividend yield of 3.9%. Bank of Montreal pays an annual dividend of $3.33 per share and has a dividend yield of 3.9%. The Toronto-Dominion Bank pays out 62.2% of its earnings in the form of a dividend. Bank of Montreal pays out 58.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. The Toronto-Dominion Bank has raised its dividend for 1 consecutive years and Bank of Montreal has raised its dividend for 1 consecutive years.
Profitability
This table compares The Toronto-Dominion Bank and Bank of Montreal's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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The Toronto-Dominion Bank | 22.23% | 11.63% | 0.62% |
Bank of Montreal | 14.82% | 10.69% | 0.55% |
Valuation & Earnings
This table compares The Toronto-Dominion Bank and Bank of Montreal's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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The Toronto-Dominion Bank | $39.92 billion | 2.86 | $8.85 billion | $3.99 | 15.74 |
Bank of Montreal | $25.68 billion | 2.15 | $3.79 billion | $5.73 | 14.90 |
The Toronto-Dominion Bank has higher revenue and earnings than Bank of Montreal. Bank of Montreal is trading at a lower price-to-earnings ratio than The Toronto-Dominion Bank, indicating that it is currently the more affordable of the two stocks.
Summary
The Toronto-Dominion Bank beats Bank of Montreal on 9 of the 16 factors compared between the two stocks.