Financial Analysis: National Australia Bank (OTCMKTS:NABZY) & Toronto Dominion Bank (NYSE:TD)

Toronto Dominion Bank (NYSE:TD) and National Australia Bank (OTCMKTS:NABZY) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Dividends

Toronto Dominion Bank pays an annual dividend of $3.15 per share and has a dividend yield of 3.3%. National Australia Bank pays an annual dividend of $0.52 per share and has a dividend yield of 3.5%. Toronto Dominion Bank pays out 34.8% of its earnings in the form of a dividend. Toronto Dominion Bank has raised its dividend for 12 consecutive years.

Insider and Institutional Ownership

52.4% of Toronto Dominion Bank shares are owned by institutional investors. 0.1% of Toronto Dominion Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Toronto Dominion Bank has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, National Australia Bank has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Toronto Dominion Bank and National Australia Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toronto Dominion Bank	0	4	2	3	2.89
National Australia Bank	2	0	0	3	2.80

Toronto Dominion Bank presently has a consensus price target of $93.00, suggesting a potential downside of 2.35%. National Australia Bank has a consensus price target of $38.00, suggesting a potential upside of 157.80%. Given National Australia Bank’s higher probable upside, analysts plainly believe National Australia Bank is more favorable than Toronto Dominion Bank.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Toronto Dominion Bank	17.52%	14.29%	0.79%
National Australia Bank	N/A	N/A	N/A

Earnings & Valuation

This table compares Toronto Dominion Bank and National Australia Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toronto Dominion Bank	$87.34 billion	1.82	$14.66 billion	$9.05	10.52
National Australia Bank	$38.78 billion	2.32	$4.35 billion	N/A	N/A

Toronto Dominion Bank has higher revenue and earnings than National Australia Bank.

Summary

Toronto Dominion Bank beats National Australia Bank on 10 of the 15 factors compared between the two stocks.

About Toronto Dominion Bank

The Toronto-Dominion Bank, together with its subsidiaries, provides various financial products and services in Canada, the United States, and internationally. It operates through four segments: Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking. The company offers personal deposits, such as chequing, savings, and investment products; financing, investment, cash management, international trade, and day-to-day banking services to businesses; and financing options to customers at point of sale for automotive and recreational vehicle purchases. It also provides credit cards and payments; real estate secured lending, auto finance, and consumer lending services; point-of-sale payment solutions for large and small businesses; wealth and asset management products, and advice to retail and institutional clients through direct investing, advice-based, and asset management businesses; and property and casualty insurance, as well as life and health insurance products. The company also provides capital markets, and corporate and investment banking products and services, including underwriting and distribution of new debt and equity issues; advice on strategic acquisitions and divestitures; and trading, funding, and investment services to corporations, governments, and institutions. It offers its products and services under the TD Bank and America's Most Convenient Bank brand names. The Toronto-Dominion Bank was founded in 1855 and is headquartered in Toronto, Canada.

About National Australia Bank

National Australia Bank Limited provides financial services to individuals and businesses in Australia, New Zealand, and internationally. The company operates through Business and Private Banking; Personal Banking; Corporate and Institutional Banking; New Zealand Banking; and Corporate Functions and Other segments. It accepts transaction accounts, savings accounts, debit cards, and term deposits; and specialized accounts, such as foreign currency, business interest, cash maximiser, farm management, community free saver, statutory trust, and project bank accounts, as well as farm management deposits. In addition, the company provides home loans, personal loans, and business loans; vehicle and equipment finance; and trade and invoice finance, as well as business overdrafts and bank guarantees. Further, it offers insurance products consisting of home and content, landlord, travel, car, caravan and trailer, life, and business insurance products; and pension, self-managed super funds, cash management, and financial planning and advisory services. Additionally, the company provides investment products; credit, debit, and business cards; payments and merchant services; online and internet banking services; small business services; international and foreign exchange solutions; and industry specific banking services. The company was founded in 1834 and is based in Melbourne, Australia.