Contents

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This article on The Toronto-Dominion Bank (TD) is the third of a 5 part series on 'The Big 5' Schedule A Canadian banks.

In my September 5th article I indicated that I viewed TD has being slightly overvalued. Shares have subsequently retraced to a level where I now view them as fairly valued.

I view TD as one of the top 2 Canadian banks and have always deemed it to be a core component of my investment portfolio.

 

Summary

  • TD reported strong FY2018 results and senior management is confident it can continue to deliver adjusted EPS growth within the 7% - 10% medium-term target range.
  • It has a well diversified business model, credit quality is strong, and it maintains a strong Basel III Common Equity Tier 1 (CET1) ratio.
  • I anticipate a $0.06/share/quarter increase in TD’s dividend when it releases its Q1 2019 results at the end of February/early March. This would bring the quarterly dividend to $0.73/share.
  • I view TD as currently being fairly valued.

All figures are expressed in CDN $ unless otherwise noted.

Introduction

This third article in this series covering the Big 5 Schedule A Canadian banks touches upon The Toronto-Dominion Bank (TSX: TD); TD released its Q4 and FY2018 earnings on November 29.

Article 1 covered The Bank of Nova Scotia (TSX: BNS) and article 2 covered The Royal Bank of Canada (TSX: RY).

In my September 5th article I indicated various headwinds/uncertainties made me reluctant to acquire additional shares in any of the Big 5 other than through the automatic reinvestment of all dividends; TD’s share price has retraced ~8% subsequent to that article.

Please refer to article 2 in which I cover Canada’s FI landscape.

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Disclaimer: I have no knowledge of your individual circumstances and am not providing individualized advice or recommendations. I encourage you not to make any investment decision without conducting your own research and due diligence. You should also consult your financial advisor about your specific situation.

Disclosure: I am long BMO, BNS, CM, RY, and TD.

I wrote this article myself and it expresses my own opinions. I am not receiving compensation for it and have no business relationship with any company whose stock is mentioned in this article.