Sumitomo Mitsui Financial Group (NYSE:SMFG) and The Toronto-Dominion Bank (NYSE:TD) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.
Profitability
This table compares Sumitomo Mitsui Financial Group and The Toronto-Dominion Bank's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Sumitomo Mitsui Financial Group | 11.93% | 5.48% | 0.28% |
| The Toronto-Dominion Bank | 22.23% | 11.63% | 0.62% |
Insider & Institutional Ownership
2.0% of Sumitomo Mitsui Financial Group shares are owned by institutional investors. Comparatively, 48.0% of The Toronto-Dominion Bank shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Volatility & Risk
Sumitomo Mitsui Financial Group has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, The Toronto-Dominion Bank has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Sumitomo Mitsui Financial Group and The Toronto-Dominion Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Sumitomo Mitsui Financial Group | 0 | 1 | 2 | 0 | 2.67 |
| The Toronto-Dominion Bank | 4 | 5 | 2 | 0 | 1.82 |
The Toronto-Dominion Bank has a consensus target price of $76.8182, suggesting a potential upside of 15.85%. Given The Toronto-Dominion Bank's higher probable upside, analysts plainly believe The Toronto-Dominion Bank is more favorable than Sumitomo Mitsui Financial Group.
Dividends
Sumitomo Mitsui Financial Group pays an annual dividend of $0.29 per share and has a dividend yield of 4.1%. The Toronto-Dominion Bank pays an annual dividend of $2.48 per share and has a dividend yield of 3.7%. Sumitomo Mitsui Financial Group pays out 29.0% of its earnings in the form of a dividend. The Toronto-Dominion Bank pays out 62.2% 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. Sumitomo Mitsui Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Sumitomo Mitsui Financial Group and The Toronto-Dominion Bank's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Sumitomo Mitsui Financial Group | $48.89 billion | 0.99 | $1.95 billion | $1.00 | 7.05 |
| The Toronto-Dominion Bank | $39.92 billion | 3.02 | $8.85 billion | $3.99 | 16.63 |
The Toronto-Dominion Bank has lower revenue, but higher earnings than Sumitomo Mitsui Financial Group. Sumitomo Mitsui Financial 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.
Summary
The Toronto-Dominion Bank beats Sumitomo Mitsui Financial Group on 10 of the 15 factors compared between the two stocks.
