Toronto-Dominion Bank (TD.TO)

Trades way too cheap at 1.4x book. Strong fundamentals. Great retail franchise in both Canada and US. Lots of capital. Still opportunity to do a deal in the US. Very safe, despite stock price volatility. Canadian banks are in very good shape. Yield is 4.73%.

Very well run, high quality, blue chip. Good brand and business model, solid balance sheet. Top 10 bank in NA. Canadian retail division generates 60% of revenues, US retail about 25%, wholesale banking represents 10%. 

First Horizon acquisition would make it a Top 6 in the US. TD can go ahead with the purchase, walk away, or renegotiate. Lots of faith in management, can create value. US banking turmoil will put pressure on valuation of Canadian banks with exposure to US. Yield is 4.69%.

He likes Canadian banks. TD has fallen alot over concerns of their First Horizon deal in the U.S. not closing, but regulators would want Horizon to be in strong hands (TD) after what's happened with SVB, etc. Canadian banks are very different from US ones, given heavier regulation here. Canadian banks are safe. TD has great retail operations in Canada and US. He expects the Horizon deal to happen and benefit TD.

Hasn't underperformed peers in quite a while, so this is a rare position for it. Its acquisition hasn't closed yet, and there's a lot of noise in US banking. He expects positive news on the acquisition, which has shrinking deposits but very strong profitability. Makes sense for TD to ask for a price cut on the purchase. A really good asset, would give them another platform for growth.

Stable business model. Discounted valuation at 9x earnings. Rare chance to buy at a discount to peers. Yield is 4.61%.

It's fall was overdone. He's recently added. Not without its risks, banking sector is not a screaming buy. For those with a long time horizon, worth adding to on any checkback, even if there's some short-term volatility. Even with the risk of SCHW exposure, the risk seems to be fully baked in, especially when trading in the mid-high $70s.

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.