Thursday, December 22, 2011

TD Bank 2

I own this stock of Toronto-Dominion Bank (TSX-TD, NYSE-TD). This is the most recent bank for me to buy. I bought some for my Locked-in RRSP in 2000 and then sold some of this in May 2009 (at a profit). I also bought some for my RRSP account in June 2009. I have made a return of 13.4% total return on this stock. Of this total return some 3.3% is dividend return. My dividends comprise 24% of my total return.

When I look at insider trading, I find a net of insider selling for $30.7M and insider selling at $32.2M. All the insider selling is by officers of the company. It would seem that officers of TD are not retaining their options. The bit of insider buying of $1.4M is all by directors of the company. Some 596 institutions own 69% of this company. Over the past 3 months there has been buying and selling and institutions have marginally increased, by 1.3%. their holdings in this stock.

The 5 year median low Price/Earnings Ratio is 11.00 and the 5 year median high P/E Ratios is 15.09. The current stock price of $73.40 has a P/E ratio of 10.40, which is on the relatively low side. I get a Graham Price of $73.40. The current stock price is some 16% lower. The low difference between the Graham Price and stock price is the stock price being 4% lower. By this measure also, the stock price is low.

I get a 10 year median Price/Book Value Ratio of 1.98. The current P/B Ratio of 1.52 is 77% lower. This also shows a low stock price. The current dividend yield of 3.71% is higher than the 5 year median dividend yield of 3.67%. The higher current dividend yield shows a relatively good stock price.

When I look at analysts’ recommendations, I find Strong Buy, Buy, Hold and Sell. The consensus recommendation would be a Buy. One Hold recommendation was worried about Canadian Bank stock volatility over the short term. Another one mentioned worries about the European situation. One Buy mentioned that TD raised their dividends twice this year. Another said he like the current dividend yield.

One Buy recommendation came with a 12 months stock price of $80. Another Buy recommendation has a 12 months stock price of $87. A couple of Buy recommendations mentioned the acquisition of Chrysler Financial Corp. They thought this was an excellent buy for TD Bank.

As I said yesterday, I currently plan to hold on to my shares in this bank. However, once Canadian Banks fully recover from the latest recession, I may have too much in this sector and may have to sell some bank stocks. At that time I will decide what to sell. I will probably do the selling from my RRSP accounts, so this probably means I will sell TD or Royal Bank.

The blogger addicted2dividend has blogged about this stock recently at The Loonie Bin.

The TD is a bank with full range of financial products and services for individuals and corporations in Canada, USA and internationally. Financial products and services include Canadian Personal and Commercial Banking; Wealth Management; U.S. Personal and Commercial Banking; and Wholesale banking products. Its web site is here TD Bank. See my spreadsheet at td.htm.

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 for stocks followed and investment notes. Follow me on twitter.

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