Monday, August 25, 2008

TD Bank 2

As I said on Friday, I bought this bank (TSX-TD) in 2000 and since that time, I have made an average annual return of 10%. The TD bank was the only bank to raise its dividend in the first quarter of this year, in April. There is no word at the moment on an October raise. If this is the only dividend raise for this year, the annual raise for this year will at 11.85%, be lower than the 5 year average raise of 13.5%. Most people expect that the earnings for 2008 will be slightly ahead of last year. However, this year will not be a great year for any Canadian Bank stock. The third quarterly reports for all banks are expected soon. The second quarter for April 2008 is out and I have updated my spreadsheet with this report.

The number of share outstanding has gone up almost 12% because of the purchase Commerce Bancorp Inc. and this is a very legitimate reason for shares to go up.

This bank has done about the same as the TSX Financial Index over the last year and, of course, worse than the TSX Index. Over the last 5 years, this stock and the TSX Financial Index has done worse than the TSX, but this is basically because of the current banking problems. If you look at the last 10 years, including the recent problems, this stock, as well as the TSX Financial Index has done much better than the TSX. It is the long term that really counts, if you are buying stocks for the long term. The TD Bank has basically tracked the TSX Financial Index.

Over all this has been a good investment for me. I can find nothing negative at this point to say about this bank. I number of analyst have a buy rating and a number have a hold rating. There is no rating that I can see below a hold. TD Bank’s current price is below its Graham price, and this does point to a good time to buy. Also, the P/E rating at 10% is lower than the 5 year average of 16.7% The yield at 4% is higher than the 5 year average of 3%. If you want to buy a bank at a good price, then this bank is at a good price.

However, I do not think the current crisis has past. It is hard to know when this will happen. There may yet be a better price for this bank. Of course there may not be. This is very hard to tell. However, currently this bank is at a good price.

TD bank is a bank with a full range of financial products and services for individuals and corporations in Canada and USA. Its web site is See my spreadsheets on this company at I have reloaded my spreadsheet to include the last quarterly figures.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on web site.

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