Toronto-Dominion Bank (TD.TO)

There is never a bad time to buy a Canadian bank. They are an oligopoly and have pricing power. They are highly profitable. All the banks are worthy investments. Now is a fine time to buy in. He holds 4 of them.

If you are planning on holding this for 5-10 years, buy it now. Trading at a nice valuation. It is going to raise its dividend this year. They are in excess cash and are going to make more acquisitions. Smart operators. Banking financial services is cyclical, so not every year is going to be the best year, but if you are buying it at 11X earnings with a 4% dividend yield he would be buyer. (See Top Picks.)

This bank is doing really well. It’s at its 20 day moving average. This is very positive. Uptrend is mostly intact. The $47 is the 100 day moving average where it is now. An exit point will be right around $46.25 level. Be willing to get out and maybe buy it back if it gets down to $42.

(A Top Pick Jan 22/13. Up 20.6%.) Doesn’t think he will see 20% this year and in fact, it will be closer to 11%. A great way to play growth in North America, particularly the US. As they acquire credit card companies and credit card portfolios, it gives them a great opportunity to cross sell. For people looking for stability, growth in dividends and a reasonable capital return this is one of the best.

There is supposed to be a stock split. Do you Buy before or after? It really doesn’t matter. Historically share splits haven’t really proved to increase the value of a stock. He likes this bank fundamentally. Today’s pullback is probably a pretty good entry point. He expects some of the Canadian banks to post decent numbers. His bias in the last 12-24 months has been to own US banks which he felt would deliver higher personal and commercial loan growths where candidates will have decelerating loan growths. This would be one of his more favourite Canadian banks. (See Top Picks.)

Have their big US operation where they have more branches. This bank has always been a good performer. Thinks the stock needs to be split which would give it a little more bounce. US side has done extremely well and they continue to emphasize the service side of the industry. Very safe stock.

From a long-term perspective, he would not hesitate to buy this bank. Trading at full valuation, but by no means is it ridiculously priced. Have done an outstanding job of developing their profitability in the US market. Increasing their dividends. A very, very well run bank.

In his process this bank ranks in the middle of the pack, so he wouldn’t own right now. Due for a stock split. Very interesting psychology that revolves around a split. Tend to perform very well before and immediately after the split. If you are looking at it from a short-term perspective, you could probably Buy it here.

This and the Royal Bank (RY-T) are the most highly valued banks on the Canadian market but are actually doing better than the other banks in terms of performance. Their foray into the US in the next 3-5 years will look very promising to anyone looking at this bank. If you would like to buy on dips, this is a good opportunity. US financials are way cheaper and have a much larger upside and profit potential.

An excellent bank. Has more US exposure than any of the other Canadian banks. As we think the US economy is going to do better, this is a pretty good thing. It doesn’t matter whether you buy it pre-split or post-split.

US exposure is almost half of the bank. They are good at managing it. Banks are now branded as TD. Americans don’t know what TD stands for. Expects above average earnings growth and dividend increases.

Reset Bonds resetting in 2016/17. They are going to be called. This kind of paper will no longer count under Basel III so they have no reason to continue to hold it.

Canadian banks could experience some tougher sledding, going forward next year. Mortgage origination is probably going to be down. Rising rates are positive on one hand, but dividend stocks are kind of negative. Don’t bother getting in now as there is not a ton of upside. Earnings are not going to accelerate for the next couple of years. Better places to be.

TD is probably the best managed but does not make it the best bargain. ROE is lower. TD is moving with the momentum of the group. Investors have probably been left disappointed and that is why we have seen a check back in this bank. Let it go for a bit and see if we can get some better prices.

(Top Pick Dec 17/12, Up 27.91%) 2 for 1 split in January. We are in a super charged growth market and these will not do as well as they have.