With 59% institutional ownership, The Toronto-Dominion Bank (TSE:TD) is a favorite amongst the big guns
Simply Wall St · 01/29 10:52

Key Insights

  • Given the large stake in the stock by institutions, Toronto-Dominion Bank's stock price might be vulnerable to their trading decisions
  • A total of 25 investors have a majority stake in the company with 43% ownership
  • Recent purchases by insiders

If you want to know who really controls The Toronto-Dominion Bank (TSE:TD), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's take a closer look to see what the different types of shareholders can tell us about Toronto-Dominion Bank.

Check out our latest analysis for Toronto-Dominion Bank

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TSX:TD Ownership Breakdown January 29th 2024

What Does The Institutional Ownership Tell Us About Toronto-Dominion Bank?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Toronto-Dominion Bank. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Toronto-Dominion Bank, (below). Of course, keep in mind that there are other factors to consider, too.

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TSX:TD Earnings and Revenue Growth January 29th 2024

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Toronto-Dominion Bank is not owned by hedge funds. BMO Asset Management Corp. is currently the largest shareholder, with 6.4% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 4.1% of common stock, and Royal Bank of Canada, Banking & Securities Investments holds about 3.5% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Toronto-Dominion Bank

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of The Toronto-Dominion Bank. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own CA$222m worth of shares (at current prices). In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Toronto-Dominion Bank better, we need to consider many other factors. For instance, we've identified 2 warning signs for Toronto-Dominion Bank that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.