Contrasting Barclays (NYSE:BCS) & Toronto-Dominion Bank (NYSE:TD)

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Barclays (NYSE:BCS) and Toronto-Dominion Bank (NYSE:TD) 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 Barclays and Toronto-Dominion Bank, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barclays 0 2 2 0 2.50
Toronto-Dominion Bank 0 2 4 0 2.67

Toronto-Dominion Bank has a consensus price target of $84.00, indicating a potential upside of 50.32%. Given Toronto-Dominion Bank’s stronger consensus rating and higher probable upside, analysts plainly believe Toronto-Dominion Bank is more favorable than Barclays.

Risk & Volatility

Barclays has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Toronto-Dominion Bank has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Institutional & Insider Ownership

2.5% of Barclays shares are held by institutional investors. Comparatively, 48.0% of Toronto-Dominion Bank shares are held by institutional investors. 0.0% of Barclays shares are held by company insiders. 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.

Dividends

Barclays pays an annual dividend of $0.41 per share and has a dividend yield of 5.8%. Toronto-Dominion Bank pays an annual dividend of $2.26 per share and has a dividend yield of 4.0%. Barclays pays out 35.3% of its earnings in the form of a dividend. Toronto-Dominion Bank pays out 44.9% 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. Toronto-Dominion Bank has raised its dividend for 2 consecutive years. Barclays is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Barclays and Toronto-Dominion Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barclays 14.72% 5.08% 0.28%
Toronto-Dominion Bank 20.24% 16.21% 0.93%

Earnings and Valuation

This table compares Barclays and Toronto-Dominion Bank’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Barclays $28.21 billion 1.08 $2.86 billion $1.16 6.13
Toronto-Dominion Bank $41.21 billion 2.48 $8.75 billion $5.03 11.11

Toronto-Dominion Bank has higher revenue and earnings than Barclays. Barclays is trading at a lower price-to-earnings ratio than Toronto-Dominion Bank, indicating that it is currently the more affordable of the two stocks.

Summary

Toronto-Dominion Bank beats Barclays on 14 of the 17 factors compared between the two stocks.

About Barclays

Barclays PLC, through its subsidiaries, provides various financial products and services in the United Kingdom, other European countries, the Americas, Africa, the Middle East, and Asia. The company operates through Barclays UK and Barclays International divisions. It offers personal and business banking services; credit and debit cards; international banking; and private banking services, which include investment, wealth planning, and credit and specialist solutions to high net worth and ultra-high net worth clients, and family offices. The company also provides investment banking services, which include financial advisory, capital raising, wealth and investment management, and financing and risk management services to corporations, governments, and financial institutions. In addition, it engages in securities dealing activities; and issues credit cards. The company was formerly known as Barclays Bank Limited and changed its name to Barclays PLC in January 1985. Barclays PLC was founded in 1690 and is headquartered in London, the United Kingdom.

About Toronto-Dominion Bank

The Toronto-Dominion Bank, together with its subsidiaries, provides various personal and commercial banking products and services in Canada and the United States. The company operates through three segments: Canadian Retail, U.S. Retail, and Wholesale Banking. It offers personal deposits, such as checking, savings, and investment products; financing, investment, cash management, international trade, and day-to-day banking services to businesses; financing options to customers at point of sale for automotive and recreational vehicle purchases through auto dealer network; credit cards; investing, advice-based, and asset management services to retail and institutional clients; and property and casualty insurance, as well as life and health insurance products. The company also provides capital markets, and corporate and investment banking services, including underwriting and distribution of new debt and equity issues; providing advice on strategic acquisitions and divestitures; and trading, funding, and investment services to companies, governments, and institutions, as well as automated teller machines, telephone, Internet, and mobile banking services. The company offers its products and services under the TD Bank, America's Most Convenient Bank, and TD Securities brand names. It offers personal and business banking products and services through a network of 1,098 branches and 3,394 automated teller machines in Canada; and through a network of 1,257 stores. The Toronto-Dominion Bank was founded in 1855 and is headquartered in Toronto, Canada.

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