Comparing Magyar Bancorp (NASDAQ:MGYR) and Toronto Dominion Bank (NYSE:TD)

Magyar Bancorp (NASDAQ:MGYR) and Toronto Dominion Bank (NYSE:TD) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Dividends

Magyar Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Toronto Dominion Bank pays an annual dividend of $3.14 per share and has a dividend yield of 2.5%. Magyar Bancorp pays out 21.4% of its earnings in the form of a dividend. Toronto Dominion Bank pays out 46.7% 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. Magyar Bancorp has increased its dividend for 3 consecutive years and Toronto Dominion Bank has increased its dividend for 12 consecutive years. Toronto Dominion Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

46.3% of Magyar Bancorp shares are held by institutional investors. Comparatively, 52.4% of Toronto Dominion Bank shares are held by institutional investors. 11.1% of Magyar Bancorp shares are held by insiders. Comparatively, 0.1% of Toronto Dominion Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Magyar Bancorp	19.74%	10.11%	1.19%
Toronto Dominion Bank	14.41%	14.88%	0.81%

Analyst Recommendations

This is a summary of current recommendations and price targets for Magyar Bancorp and Toronto Dominion Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magyar Bancorp	0	1	0	0	2.00
Toronto Dominion Bank	0	4	3	2	2.78

Toronto Dominion Bank has a consensus price target of $148.00, suggesting a potential upside of 18.88%. Given Toronto Dominion Bank’s stronger consensus rating and higher possible upside, analysts plainly believe Toronto Dominion Bank is more favorable than Magyar Bancorp.

Valuation & Earnings

This table compares Magyar Bancorp and 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
Magyar Bancorp	$63.60 million	2.27	$9.76 million	$1.87	11.93
Toronto Dominion Bank	$65.07 billion	3.12	$14.66 billion	$6.73	18.50

Toronto Dominion Bank has higher revenue and earnings than Magyar Bancorp. Magyar Bancorp 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.

Volatility & Risk

Magyar Bancorp has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Toronto Dominion Bank has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Summary

Toronto Dominion Bank beats Magyar Bancorp on 14 of the 18 factors compared between the two stocks.

About Magyar Bancorp

Magyar Bancorp, Inc. operates as the holding company for Magyar Bank that provides various consumer and commercial banking services to individuals, businesses, and nonprofit organizations in New Jersey, the United States. It accepts various deposit accounts, including demand, savings, NOW, money market, and retirement accounts, as well as certificates of deposit. The company also provides residential mortgage loans, multi-family and commercial real estate mortgage loans, home equity loans and lines of credit, commercial business loans, and construction loans, as well as small business administration loans. In addition, it offers non-deposit investment products and financial planning services, including insurance products, fixed and variable annuities, and retirement planning for individual and commercial customers; and buys, sells, and holds investment securities. The company has branch offices located in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison, New Jersey. Magyar Bancorp, Inc. was founded in 1922 and is headquartered in New Brunswick, New Jersey.

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.