Toronto-Dominion Bank (TD.TO)

One of the best-managed banks in Canada. Great acquisitions in the States. Issue is they're being hit on deposits with higher interest rates. Long runway.

Now has some $20B in excess capital. Good position to be in if they decide on another acquisition, it's a buyer's market. Could increase dividends, buy back shares. Nothing fundamentally broken. Should grow earnings and dividends at high single-digit pace. Good 5% dividend yield. Timely entry point.

Likes the sector. Stock's attractively priced given overhangs of failed acquisition and SCHW issues. Attractive multiple, both historically and relative to peers. Lots of excess cash. Yield is 4.70%.

It has the largest capital base of all Canadian banks. It has fallen to third place, price-wise, related to the other major Canadian banks so is attractive to buy now. National Bank now has the second best P/E.

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%.