Exit The Toronto-Dominion Bank

In my May 13 post, I disclosed that I had exited The Bank of Montreal (BMO), The Bank of Nova Scotia (BNS), and The Canadian Imperial Bank of Commerce (CM). I am now pleased to report that I have exited The Toronto-Dominion Bank (TD). My only remaining exposure to the Canadian banking sector is The Royal Bank of Canada (RY).

Despite short-term headwinds, the major Canadian banks may be suitable long-term investment for some shareholders (not me); this May 22, 2024 BNNBloomberg article explains what investors can expect from the upcoming Q2 earnings releases from the Canadian banks.

My reasoning for exiting these banks is that I think I can generate far superior total long-term shareholder returns by continuing to focus on high quality US companies.

The vast majority of my investments since ~2010 have been publicly listed US companies such as:

  • Visa
  • Mastercard
  • Berkshire Hathaway
  • Standard & Poor
  • Moody's
  • Apple
  • Microsoft
  • Danaher
  • Lockheed Martin
  • Raytheon Technologies
  • Intercontinental Exchange
  • Nasdaq
  • Thermo Fisher Scientific
  • Copart
  • Intuitive Surgical
  • Paychex
  • Automatic Data Processing
  • CME Group
  • Agilent Technologies
  • Walmart
  • Exxon
  • Chevron

Unless I am mistaken, these types of companies are not found in Canada!

I have exited the following Canadian holdings:

  • SmartCentres Real Estate Investment Trust
  • Enbridge
  • BCE
  • Emera
  • The Bank of Montreal
  • The Bank of Nova Scotia
  • The Canadian Imperial Bank of Commerce
  • The Toronto-Dominion Bank

Changes made in 2024 will change the rankings of my holdings; I intend to perform a follow up to my 2023 Year End FFJ Portfolio Review at the end of June.

Furthermore, my dividend income will drop significantly. I have replaced companies with attractive dividend metrics with companies that either distribute no dividend or which have a very low dividend yield.

Dividend metrics, however, are of little relevance to my investment decisions. My focus is on a company's TOTAL long-term investment return potential. Reinvesting in the company, repurchasing shares, or strategic acquisitions can sometimes be superior to distributing dividends. Once a company becomes know for its attractive dividend distribution policy, investors come to EXPECT dividend growth.

Final Thoughts

I have very little interest in increasing my exposure to Canadian companies and my existing Canadian holdings will likely remain limited to:

  • Alimentation Couche-Tard
  • The Royal Bank of Canada
  • Brookfield Corporation
  • Brookfield Asset Management
  • Brookfield Infrastructure
  • Brookfield Renewable
  • Intact Financial
  • Canadian National Railway
  • Canadian Pacific Kansas City

I wish you much success on your journey to financial freedom!

Note: Please send any feedback, corrections, or questions to [email protected].

Disclosure: I have no exposure to BCE, BMO, CM, BNS, EMA, ENB, SRU.un, and TD.

Disclaimer: I do not know your circumstances and do not provide individualized advice or recommendations. I encourage you to make investment decisions by conducting your research and due diligence. Consult your financial advisor about your specific situation.

I wrote this article myself and it expresses my own opinions. I do not receive compensation for it and have no business relationship with any company mentioned in this article.