Toronto Dominion Bank (The) (NYSE: TD) and TCF Financial Corporation (NYSE:TCF) are both mid-cap banks – nec companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.

Dividends

Toronto Dominion Bank (The) pays an annual dividend of $1.86 per share and has a dividend yield of 3.2%. TCF Financial Corporation pays an annual dividend of $0.30 per share and has a dividend yield of 1.6%. Toronto Dominion Bank (The) pays out 44.9% of its earnings in the form of a dividend. TCF Financial Corporation pays out 26.5% 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.

Profitability

This table compares Toronto Dominion Bank (The) and TCF Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Toronto Dominion Bank (The) 22.85% 14.71% 0.85%
TCF Financial Corporation 15.27% 9.63% 0.98%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Toronto Dominion Bank (The) and TCF Financial Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Toronto Dominion Bank (The) 0 2 6 0 2.75
TCF Financial Corporation 1 7 4 0 2.25

Toronto Dominion Bank (The) currently has a consensus price target of $71.00, suggesting a potential upside of 23.20%. TCF Financial Corporation has a consensus price target of $18.27, suggesting a potential upside of 0.12%. Given Toronto Dominion Bank (The)’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Toronto Dominion Bank (The) is more favorable than TCF Financial Corporation.

Volatility & Risk

Toronto Dominion Bank (The) has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, TCF Financial Corporation has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Institutional & Insider Ownership

47.3% of Toronto Dominion Bank (The) shares are owned by institutional investors. Comparatively, 82.4% of TCF Financial Corporation shares are owned by institutional investors. 2.5% of TCF Financial Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Toronto Dominion Bank (The) and TCF Financial Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Toronto Dominion Bank (The) $30.89 billion 3.45 $6.65 billion $4.14 13.92
TCF Financial Corporation $1.40 billion 2.25 $212.12 million $1.13 16.15

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

Summary

Toronto Dominion Bank (The) beats TCF Financial Corporation on 10 of the 16 factors compared between the two stocks.

Toronto Dominion Bank (The) Company Profile

Toronto-Dominion Bank (the Bank) is a Canada-based bank, which operates in the North America. It is an online financial services firm, with over 10.2 million online and mobile customers. Its segments include Canadian Retail, U.S. Retail, Wholesale Banking and Corporate. The Canadian Retail segment provides a range of financial products and services to customers in the Canadian personal and commercial banking businesses. The U.S. Retail segment consists of its retail and commercial banking operations operating under the brand TD Bank, and wealth management services in the United States. The Wholesale Banking segment provides a range of capital markets, investment banking, and corporate banking products and services, including underwriting and distribution of new debt and equity issues, providing advice on strategic acquisitions and divestitures, funding and investment needs of its clients. The Corporate segment provides centralized advice and counsel to its businesses.

TCF Financial Corporation Company Profile

TCF Financial Corporation (TCF) is a bank holding company. The Company’s principal subsidiary is TCF National Bank (TCF Bank). The Company operates in three segments: Consumer Banking, Wholesale Banking and Enterprise Services. Consumer Banking comprises all of the Company’s consumer-facing businesses. The Consumer Banking segment includes retail banking, consumer real estate and auto finance. Wholesale Banking comprises commercial real estate and business lending, leasing and equipment finance and inventory finance. TCF’s consumer banking strategy is primarily to generate deposits to use for funding high credit quality secured loans and leases. Enterprise Services comprises corporate treasury, corporate functions and the Holding Company. As of December 31, 2016, the Company’s total securities available for sale were $1.4 billion. As of December 31, 2016, the Company’s total loans were $17.8 billion. As of December 31, 2016, the Company’s total deposits were $17.2 billion.

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