The Toronto-Dominion Bank (NYSE:TD) and NatWest Group (NYSE:NWG) are both large-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.
Profitability
This table compares The Toronto-Dominion Bank and NatWest Group'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% |
NatWest Group | 5.25% | 6.48% | 0.36% |
Dividends
The Toronto-Dominion Bank pays an annual dividend of $2.48 per share and has a dividend yield of 3.7%. NatWest Group pays an annual dividend of $0.08 per share and has a dividend yield of 1.5%. The Toronto-Dominion Bank pays out 62.2% of its earnings in the form of a dividend. NatWest Group pays out 12.1% 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 increased its dividend for 1 consecutive years. The Toronto-Dominion Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares The Toronto-Dominion Bank and NatWest Group's gross 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 | 3.02 | $8.85 billion | $3.99 | 16.63 |
NatWest Group | $22.45 billion | 1.46 | $4.52 billion | $0.66 | 8.21 |
The Toronto-Dominion Bank has higher revenue and earnings than NatWest Group. NatWest Group 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.
Risk & Volatility
The Toronto-Dominion Bank has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, NatWest Group has a beta of 1.54, suggesting that its share price is 54% 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, 0.4% of NatWest Group shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for The Toronto-Dominion Bank and NatWest Group, as reported by MarketBeat.
| 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 |
NatWest Group | 0 | 8 | 6 | 1 | 2.53 |
The Toronto-Dominion Bank currently has a consensus price target of $76.8182, suggesting a potential upside of 15.78%. Given NatWest Group's stronger consensus rating and higher probable upside, analysts plainly believe NatWest Group is more favorable than The Toronto-Dominion Bank.
Summary
The Toronto-Dominion Bank beats NatWest Group on 10 of the 17 factors compared between the two stocks.