Toronto Dominion (TD.TO)

Modest beat last quarter, the only bank that had positive operating leverage. Margins good, but slowing. Modelling 8% growth, trading at 8x 2024 earnings. Bank turmoil has brought some names down more than they should, and this is one of them.

With the pullback it is at a good entry point for income and its dividend will grow. A lot of shorts have brought the price down. The Canadian banks are much more insulated than the U.S. regional banks from commercial real estate concerns since only 3% of the loans book is related to office space.

He's inclined to start looking at banks, and TD is at the top of the list. They have to deal with the First Horizon issue, as that stock has collapsed with the US regionals. Taken a hit on SCHW, too, and it impacts their capital ratios. Valuation has come down, good US footprint, short-term risk with the acquisition. Might be calmer in a couple of weeks, and that might be a bottom.

Canadian investors are well-familiar with TD. It ranks second behind Royal in size, pays a 4.97% dividend, trades at a beta of only 0.83 and 9.47x earnings, and boasts a 37.52% profit margin. Also, TD beat its last four quarters. As recently as February, TD was trading at $93.56 and only on Monday has it started climbing above $78 after its recent punishment. It currently trades below its 50- and 200-day moving averages of $88.16 and $86.93 respectively by around $10. Read TD and Amazon: Buy on Weakness? for our full analysis. 

One of 2 global, systemically important banks in Canada. If First Horizon closes, will become 6th largest US bank. Currently earns 16% ROE. Grown dividend at a 9% pace over the last decade. Market concerns on SCHW and overpaying for FHN are overdone. Don't get much better opportunities to buy it than now. Yield is an eye-popping 4.91%.

A key bank in her portfolio. Take advantage of the current pullback. TD is solid and secure in a highly regulated environment. TD has been impacted for its exposure to the US. The First Horizon deal won't close by the end-May deadline, but will be moved. Given the turmoil in regional banks in the US, TD can probably re-negotiate a more favourable deal. Canadian banks can't expand much in Canada, so the US is attractive. TD has a 10% interest in Schwab, which was hit in the current turmoil. Eventually, the sector will stabilize and these stocks will reverse higher. TD is well-run and pays a good dividend. She added to her holding during this turmoil the past week.

He owns the five Canadian big banks. Although new mortgages will be down he is not particularly concerned about it. TD is more of a retail bank which is good in these times. Also it is one of the top ten banks in the U.S.

Not expensive at 1.4x book, yield of 4.2%, great capital ratios. US acquisition will probably go through, though it may be deferred. A big, but not massive, acquisition. Incredible US franchise, but ROE hasn't been as good as Canadian retail division. Execution of integrating recent asset management purchase will be key. Loan loss provisions can handle any housing mortgage issue.

He's been taking some money out of MFC on earnings trepidation in Asian operations. He's been adding to bank stocks, and TD is at the top of the list with its US acquisition still being finalized. MFC was trading at 8x PE with a 5% yield, whereas TD is more expensive. TD has more growth potential. 

Has performed relatively well vs. the index, as do the Canadian banks. People are concerned about credit risk as we face an economic downturn. Still likes TD. Pending is a massive deal with First Horizons, a U.S. regional bank that will make TD an even-bigger bank in the US.

Doesn't own any Canadian banks. Scale advantage, favourable regulatory environment. Further competition in the space erodes their moat. If he were to own any banks, the two that stood out when he reviewed their financials 3 years ago were TD and RY.

Valuation is in the middle among Canadian banks. Premium price-to-book and pays a dividend over 4%. TD remains consistent, therefore good as a long-term hold. Though, there will be slightly less capital appreciation vs. its peers.