Head-To-Head Analysis: Toronto–Dominion Bank (TD) vs. ICICI Bank (NYSE:IBN)

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

Volatility and Risk

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Toronto–Dominion Bank has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, ICICI Bank has a beta of 1.89, indicating that its stock price is 89% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Toronto–Dominion Bank and ICICI Bank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Toronto–Dominion Bank 0 2 8 0 2.80
ICICI Bank 0 0 2 1 3.33

Toronto–Dominion Bank currently has a consensus target price of $80.00, indicating a potential upside of 42.37%. Given Toronto–Dominion Bank’s higher probable upside, analysts plainly believe Toronto–Dominion Bank is more favorable than ICICI Bank.

Earnings & Valuation

This table compares Toronto–Dominion Bank and ICICI Bank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Toronto–Dominion Bank $34.52 billion 3.00 $7.95 billion $4.24 13.25
ICICI Bank $10.97 billion 2.56 $1.52 billion $0.45 19.49

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

Dividends

Toronto–Dominion Bank pays an annual dividend of $1.95 per share and has a dividend yield of 3.5%. ICICI Bank pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. Toronto–Dominion Bank pays out 46.0% of its earnings in the form of a dividend. ICICI Bank pays out 17.8% 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. ICICI Bank has increased its dividend for 5 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Toronto–Dominion Bank 22.12% 15.76% 0.88%
ICICI Bank 11.74% 7.95% 0.88%

Institutional and Insider Ownership

48.8% of Toronto–Dominion Bank shares are owned by institutional investors. Comparatively, 21.8% of ICICI Bank shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Toronto–Dominion Bank beats ICICI Bank on 10 of the 16 factors compared between the two stocks.

About Toronto–Dominion Bank

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.

About ICICI Bank

ICICI Bank Limited, together with its subsidiaries, provides banking and financial services in India and internationally. It operates through Retail Banking, Wholesale Banking, Treasury, Other Banking, Life Insurance, General Insurance, and Others segments. The company offers savings, salary, pension, current, other accounts; and fixed, recurring, and security deposits. It also provides home, car, two wheeler, personal, gold, and commercial business loans, as well as loans against securities and other loans; business loans, such as working capital finance, term loans, collateral free loans, loans without financials, finance for importers and exporters, and secured loans for credit card swipes, as well as loans for new entities, and schools and colleges; and credit, debit, prepaid, travel, and corporate cards. In addition, the company offers life, health, travel, car, two wheeler, home, and student medical insurance products; pockets wallet; fixed income products; investment products, such as mutual funds, gold monetization schemes, and initial public offerings, as well as other online investment services; and farmer finance, tractor loans, and micro banking services, as well as other services to agri traders and processors, and agri corporates. Further, it provides portfolio management, trade, foreign exchange, locker, private and NRI banking, and cash management services; family wealth and demat accounts; commercial banking, investment banking, capital markets and custodial, project and technology finance, and institutional banking services, as well as Internet, mobile, and phone banking services. Additionally, the company offers securities investment, broking, trading, and underwriting services; and merchant banking, private equity/venture capital fund management, trusteeship, and pension fund management services. As of March 31, 2017, it had a network of 4,850 branches and 13,882 ATMs. ICICI Bank Limited was founded in 1955 and is based in Mumbai, India.

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