TD vs RY

For growth investors, Royal Bank of Canada (RY) is the stronger pick with 2.

1% revenue growth year-over-year, versus -2. 8% for The Toronto-Dominion Bank (TD). The Toronto-Dominion Bank (TD) offers the better valuation at 13. 7x trailing P/E (12. 2x forward), making it the more compelling value choice. Analysts rate The Toronto-Dominion Bank (TD) a "Buy" — based on 17 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, The Toronto-Dominion Bank (TD) is the cheapest at 13.

7x versus Royal Bank of Canada at 19. 3x. On forward P/E, The Toronto-Dominion Bank is actually cheaper at 12. 2x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: The Toronto-Dominion Bank wins at 0. 98x versus Royal Bank of Canada's 1. 00x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Royal Bank of Canada (RY) delivered a total return of +106.

0%, compared to +75. 9% for The Toronto-Dominion Bank (TD). Over 10 years, the gap is even starker: RY returned +271. 8% versus TD's +209. 4%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Royal Bank of Canada (RY) is the lower-risk stock at 0.

73β versus The Toronto-Dominion Bank's 0. 76β — meaning TD is approximately 4% more volatile than RY relative to the S&P 500. On balance sheet safety, The Toronto-Dominion Bank (TD) carries a lower debt/equity ratio of 5% versus 6% for Royal Bank of Canada — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Royal Bank of Canada (RY) is pulling ahead at 2.

1% versus -2. 8% for The Toronto-Dominion Bank (TD). On earnings-per-share growth, the picture is similar: The Toronto-Dominion Bank grew EPS 144. 9% year-over-year, compared to 25. 5% for Royal Bank of Canada. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

The Toronto-Dominion Bank (TD) is the more profitable company, earning 17.

7% net margin versus 14. 8% for Royal Bank of Canada — meaning it keeps 17. 7% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: TD leads at 20. 7% versus 18. 7% for RY. At the gross margin level — before operating expenses — TD leads at 49. 0%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, The Toronto-Dominion Bank (TD) is the more undervalued stock at a PEG of 0. 98x versus Royal Bank of Canada's 1. 00x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, The Toronto-Dominion Bank (TD) trades at 12. 2x forward P/E versus 12. 5x for Royal Bank of Canada — 0. 3x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for TD: -21. 3% to $89. 52.

All stocks in this comparison pay dividends.

The Toronto-Dominion Bank (TD) offers the highest yield at 2. 8%, versus 2. 3% for Royal Bank of Canada (RY).

For long-horizon retirement investors, Royal Bank of Canada (RY) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.

73), 2. 3% yield, +271. 8% 10Y return). Both have compounded well over 10 years (RY: +271. 8%, TD: +209. 4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: TD is a mid-cap deep-value stock; RY is a large-cap quality compounder stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.