Toronto-Dominion Bank (TD.TO)

Overhang due to US issues from First Horizon plus anti-money laundering procedures. Still a great bank. Well positioned in US, very strong deposit base in Canada. Low funding cost for loans and mortgages. Lots of capital. 

Continues to think the franchise value is there, strong, and growing. In the wake of failed acquisition, question marks surrounding leadership and strategy. Best way to answer this is to put up good financial performance. Continues to own and buy.

Lots of excess capital gives them flexibility. Buy if you're looking for income.

The last quarter disappointed investors and it was the only bank to announce re-structuring for next year, not just the last quarter as the other banks did. There are $500 million in expenditures needed for risk management and anti money laundering controls. Therefore the stock price has dropped but once this has all settled down it should be able to catch up to its peers. It pays a dividend of almost 5%.    Buy 9  Hold 6  Sell 1

It is OK on the monthlies but financials haven't done too much and there are better places to be. You could own TD or Royal Bank for the long term but don't buy for a trade since it could head down.

Same comments as with Royal Bank. Both enjoy a regulated oligopoly. TD is well exposed to the US and enjoys a healthy wealth management business. TD is heavily capitalized, more than RY, because they couldn't buy First Horizon last spring. They can raise dividends, buyback shares and/or buy companies. Trades at a discount to the 5-year PE. The dividend will grown. Expect double-digit returns. He doesn't see a housing bubble, though housing supply is short as immigration inflows remain strong. That said, TD is exposed to a potential downturn in housing prices, but is a short-term headwind.

Banks in Canada are trading at good prices. TD has more capital than other Canadian banks so it is in a position to make acquisitions. Also it is geographically diversified. It has a 4.6% dividend and trades at 10X earnings. In general Canadian banks are well regulated and more diversified than U.S. regional banks. They are also good at reserving for when times are bad. The risk is that there are more variable rate mortgages in place.
Buy 11  Hold 4  Sell 1

A favourite of his. A good time, generally, to start looking at the banking sector to get back in.

Try RY for wealth management, or TD for US retail banking. His preferences in the space, and he owns both.

All Canadian banks are down for the year, due to higher interest rates and the contagion from the US regionals earlier this year. TD remains a quality blue-chip bank with a strong balance sheet. Has the biggest deposit base in Canada. Has plenty of branches in the US eastern seaboard. They didn't buy a US bank earlier this year so they have a lot of cash. Trades at a very low single-digit PE and pays over a 5% dividend yield, both rare occurrences. A contrarian call.

(A Top Pick Aug 14/23, Down 9%)

Will continue to own shares. Higher interest rates hard on business. Lots of capital on the balance sheet. Will begin to buy back shares. Has expressed interest in new immigrants to sell products to. 

Mortgage renewals amid rising rates won't hurt banks (they can manage it), but the households making payments. Banks underwrite mortgages well and are conservative. TD was disappointed not to buy First Horizon a few months ago, but they have a first-class problem of holding too much cash, which they can use to buyback shares, raise the dividend or buy another company. Likes TD's positioning and capital markets business.

Likes Canadian bank sector at this time. Most exposure to USA. Excellent business. Strong brand name in Canada. Good management team. Owns shares in business. 

Cheap, trading at 1.4x book and pays a 4.77% dividend yield. Lots of capital after their Horizon deal didn't happen. Are highly diversified with lots of fee income, but well-regulated. It's a tough year for banks, but TD has lots of capital and can buyback shares and make an acquisition.