Comparing BlackRock (BLK) and TD Ameritrade (AMTD)

BlackRock (NYSE: BLK) and TD Ameritrade (NASDAQ:AMTD) are both large-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.

Earnings and Valuation

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This table compares BlackRock and TD Ameritrade’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BlackRock $12.49 billion 6.77 $4.97 billion $22.60 23.20
TD Ameritrade $3.68 billion 9.45 $872.00 million $1.84 33.28

BlackRock has higher revenue and earnings than TD Ameritrade. BlackRock is trading at a lower price-to-earnings ratio than TD Ameritrade, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

BlackRock has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500. Comparatively, TD Ameritrade has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for BlackRock and TD Ameritrade, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock 0 4 8 0 2.67
TD Ameritrade 1 4 11 0 2.63

BlackRock presently has a consensus target price of $562.67, suggesting a potential upside of 7.29%. TD Ameritrade has a consensus target price of $61.81, suggesting a potential upside of 0.95%. Given BlackRock’s stronger consensus rating and higher possible upside, analysts plainly believe BlackRock is more favorable than TD Ameritrade.

Profitability

This table compares BlackRock and TD Ameritrade’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackRock 39.22% 12.91% 1.80%
TD Ameritrade 23.39% 18.27% 3.39%

Institutional and Insider Ownership

84.8% of BlackRock shares are owned by institutional investors. Comparatively, 92.0% of TD Ameritrade shares are owned by institutional investors. 1.9% of BlackRock shares are owned by company insiders. Comparatively, 0.4% of TD Ameritrade shares are owned 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

BlackRock pays an annual dividend of $11.52 per share and has a dividend yield of 2.2%. TD Ameritrade pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. BlackRock pays out 51.0% of its earnings in the form of a dividend. TD Ameritrade pays out 45.7% 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. BlackRock has raised its dividend for 8 consecutive years. BlackRock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

BlackRock beats TD Ameritrade on 10 of the 17 factors compared between the two stocks.

About BlackRock

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.

About TD Ameritrade

TD Ameritrade Holding Corporation provides securities brokerage and related technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. Its products and services include tdameritrade.com, a Web platform for self-directed retail investors; Trade Architect, a Web-based platform for investors and traders to identify opportunities and stay informed; thinkorswim, a desktop platform for traders; and TD Ameritrade Mobile, which allows on-the-go investors and traders to trade and monitor accounts. The company also offers TD Ameritrade Institutional that provides brokerage and custody services to approximately 6,000 independent RIAs and their clients; TD Ameritrade Education, which allows investor education for stocks, options, income investing, and portfolio management; TD Ameritrade's Goal Planning that offers investment consulting and planning services; Selective Portfolios, an advisory service, which develops portfolios of exchange-traded funds (ETFs) and mutual funds; AdvisorDirect, a national referral service for investors; TD Ameritrade Singapore Pte. Ltd. that enables retail investors in Singapore to trade the U.S. markets; and TD Ameritrade Corporate Services, which provide self-directed brokerage services to employees of corporations. In addition, it offers various retail brokerage products and services, such as common and preferred stocks; ETFs; options; futures; foreign exchange; mutual funds; fixed income products; primary and secondary offerings of fixed income securities, closed-end funds, and preferred stocks; margin lending; cash management services; and annuities. The company provides its services primarily through the Internet, a network of retail branches, mobile trading applications, interactive voice response, and registered representatives through telephone. TD Ameritrade Holding Corporation was founded in 1971 and is headquartered in Omaha, Nebraska.

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