Stock of the Day

February 17, 2020

Toronto-Dominion Bank (TD)

$59.82
-$0.54 (-0.9%)
Market Cap: $105.66B

About Toronto-Dominion Bank

The Toronto-Dominion Bank, together with its subsidiaries, provides various financial products and services in Canada, the United States, and internationally. It operates through four segments: Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking. The company offers personal deposits, such as chequing, savings, and investment products; financing, investment, cash management, international trade, and day-to-day banking services to businesses; and financing options to customers at point of sale for automotive and recreational vehicle purchases. It also provides credit cards and payments; real estate secured lending, auto finance, and consumer lending services; point-of-sale payment solutions for large and small businesses; wealth and asset management products, and advice to retail and institutional clients through direct investing, advice-based, and asset management businesses; and property and casualty insurance, as well as life and health insurance products. The company also provides capital markets, and corporate and investment banking products and services, including underwriting and distribution of new debt and equity issues; advice on strategic acquisitions and divestitures; and trading, funding, and investment services to corporations, governments, and institutions. It offers its products and services under the TD Bank and America's Most Convenient Bank brand names. The Toronto-Dominion Bank was founded in 1855 and is headquartered in Toronto, Canada.

Toronto-Dominion Bank Bull Case

Here are some ways that investors could benefit from investing in The Toronto-Dominion Bank:

  • The Toronto-Dominion Bank recently increased its quarterly dividend to $0.7482 per share, reflecting a commitment to returning value to shareholders. This increase from the previous dividend indicates a positive outlook on profitability.
  • With a current stock price around $54.77, the bank is trading below its 200-day moving average of $57.38, which may suggest a potential for price appreciation as it moves back towards this average.
  • The bank has a solid market capitalization of $101.28 billion, indicating a stable and established presence in the financial sector, which can provide a sense of security for investors.
  • The price-to-earnings (P/E) ratio of 16.67 suggests that the stock may be reasonably valued compared to its earnings, making it an attractive option for value investors.
  • The Toronto-Dominion Bank has a relatively low beta of 0.84, indicating that it is less volatile than the overall market. This can be appealing for investors looking for stability in their portfolio.

Toronto-Dominion Bank Bear Case

Investors should be bearish about investing in The Toronto-Dominion Bank for these reasons:

  • The payout ratio is currently at 84.15%, which indicates that a significant portion of earnings is being paid out as dividends. This could limit the bank's ability to reinvest in growth opportunities.
  • Recent downgrades from analysts, including a shift from "buy" to "hold" ratings, may signal a lack of confidence in the bank's short-term performance, which could affect investor sentiment.
  • The consensus target price of $80.50 suggests limited upside potential from the current stock price, which may not attract aggressive investors looking for significant gains.
  • Market analysts have mixed ratings on the stock, with one sell rating and several hold ratings, indicating uncertainty about the bank's future performance.
  • Recent economic conditions and regulatory changes in the financial sector could pose risks to profitability and growth, making it a less attractive investment in the current climate.

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