Wednesday, January 16, 2013

Toronto Dominion Bank

On my other blog I am today writing about a dividend spreadsheet to track dividend payments...continue...

I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). I bought this stock in 2000 because the price was good. I have made 13.81% per year on this stock with 10.41% from capital gain and 3.40% from dividends. However, I have followed this stock for a long time, not just since when I bought it.

This stock also kept dividends level for a couple of years because of the 2008 bear market and following recession. The dividend growth over the past 5 and 10 years is at 6.49% and 9.94% per year. The 5 year dividend increase is quite good for a Canadian bank.

The 5 year median Dividend Payout Ratios are good coming in at 50% for earnings and 31% for cash flow. The DPRs for 2012 were 43% and 31% for earnings and cash flow. If dividends remain level in 2013 the DPRs would be 39% and 32% for earnings and cash flow and shows that there is room for more growth in dividends.

The 5 and 10 year total return to the end of 2012 was 7.19% and 13.34% per year with 3.8% and 9.43% from capital gains per year. The dividend portion of this return was 3.39% and 3.91% per year, respectively.

The outstanding dividends have been growing at the rate of 5.1% and 3.6% per year over the past 5 and 10 years. Growth is from DRIP, stock options and issuance of new shares.

Revenue is up by 3.77% and 6.16% per year over the past 5 and 10 years. Revenue per share is down over the past 5 years by 1.22% per year and is up over the past 10 years at 2.48% per year. Earnings per Share is up by 4.29% and 18.12% per year over the past 5 and 10 years.

Cash Flow per Share is up by 6.88% and 3.95% per year over the past 5 and 10 years and Book Value per Share is up 10.5% and 10.4% per year over the past 5 and 10 years. By far, BV is up the best.

The Return on Equity is good for this stock as it came in at 13.3% for the 2012 financial year and the 5 year median rate is 12.7%. The ROE on comprehensive income confirms the ROE on net income by coming in at 12.3% for the 2012 financial year and having a 5 year median rate of 12.5%.

The debt ratios are not bad for a bank and are quite typical with the Debt Ratio at 1.06% and the Leverage and Debt/Equity Ratios at 18.38 and 17.27.

I have owned this stock for around 13 years and I am earning on my original investment a yield of 8.6%. At this rate after holding this stock for 20 years, I would expect to earnings over 13% on my original investment. (I talk about dividend yields on original investments on my site.)

However, I would expect to do better under this stock as the dividends were stalled for a few years in the time I held this stock. In 20 years' time I could possibly be getting 23 to 25% yield on my original investment. However, no one really knows what will happen in the future.

I am pleased this investment and I will continue to hold this stock. However, I will not be buying any more for the simple fact I have too much of this stock already in my portfolio.

The TD bank is a bank with a 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. 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 or StockTwits.

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