TD Bank

I own this stock (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.

I have not done as well on this bank stock as on BMO and Royal because I have not had it as long. Also, I have done much better in the RRSP account with a total return of 23%. For my Locked-in RRSP my return is only 9.2%. The 2008 bear market has hit our banks hard and they have yet to fully recover. I will probably sell some bank stock when they do as I will have too much of my portfolio in bank stocks when they fully recover.

For TD Bank, the dividends were just not increased in 2009 and 2010. They were increased in 2011 twice. The first increase was for 8.2% and the second one for 3% with total increase at 11.5% for the year. The growth in dividends over the past 5 and 10 years is 8% and 9%. The 5 year median Dividend Payout Ratios are 49% for earnings and 31% for CF. They were lower in 2011 and are expected to be lower again in 2012.

Total return over the past 5 and 10 years on this stock is 6.4% and 11.3% per year respectively. The portion attributable to dividends is 3.5% and 3.6%. The portion of the total return attributable to dividends over the past 5 and 10 years is 54% and 32%, respectively.

The best growth rates for this stock is in book value, which over the past 5 and 10 years has grown at 12.5% and 9.8% per year, respectively. The worse is probably revenue, which has not grown over the past 5 and 10 years. Earnings have grown 0% over the past 5 years, and 12.1% per year, over the past 10 years. Cash Flow has grown at 8.7% and 3.4% per year over the past 5 and 10 years.

Return on Equity has still been good over the past few years. The ROE at the end of 2011 was 13.1%. The 5 year median ROE was 12.7%. Both ROEs are quite good. The ROE using Comprehensive Income is a bit lower at 12.5 at the end of 2011 and this has a 5 year median of 12.9%. This is also in the good range of 10% to 15%.

The Asset/Liability Ratio at 1.07 is typical for a bank. The Leverage and Debt/Equity Ratios at 15.79 and 14.72 are better than the other banks and better than the 10 year median ratios of 20.29 and 19.27.

I am pleased with my investment in TD bank and will hold on to it for now. However, I expect that when the banks fully recover I might want to sell some bank stock. However, stocks in the financial service industry make up just 24% of my portfolio. Its portion would have to be over 30% before I would consider selling any. My insurance company investment would also have to recover.

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.