Toronto Dominion Bank 2

I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). When I sold some Metro in 2009, I bought this stock. It is the 3rd bank stock I bought. I first bought this stock in 2000 and some more in 2009. I have a total return of 14.74% per year with 3.32% from dividends per year and 11.42% from capital gains.

When I look at insider trading, I find $97.8M of insider selling and $2.6M of insider buying with net insider selling of $95.2M. There is some insider ownership with the CEO having shares worth around $55.8M, the CFO having shares worth around 1.6M; the Chairman with shares worth around 1.5M and a director with shares worth around $14.9M. In 2013 outstanding shares were increased by 4.2M shares because of stock options. This number of shares is currently worth around $412M.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.42, 12.63 and 13.84. The current P/E Ratio is 11.72 based on a stock price of $98.10 and 2014 earnings estimates of $8.37. This stock test suggests that the stock price is reasonable.

I get a Graham Price of $98.19. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 1.00 and 1.13. The current P/GP Ratio is 1.00. This stock price test suggests that the stock price is reasonable.

I get a 10 year median Price/Book Value per Share of 1.72. The current P/B Ratio is 1.92 a value some 11% higher. This stock test suggests that the stock price is reasonable as the current P/B Ratio is not that much higher than the 10 year median P/B Ratio.

The current dividend yield is 3.51%. The 5 year median dividend yield is 3.71%. The current yield some 6% higher. These are close so the stock price is considered to be reasonable. However, if you look at the historical average dividend yield it is 3.31% and the current one is some 5.9% higher. This test says that the current stock price is cheaper than average. However, there is not that much in difference, so we come back to a reasonable price.

An article by Motley Fool gives 3 Top Canadian Stocks for 2014 and TD is included in this list. In July 2013, the blogger of Dividend Growth Investing and Retirement did an analysis of this bank. You can see some recent comments on this bank at Stockchase site. At the Globe and Mail Lou Schizas gives this bank a favorable report.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Sell recommendations. The consensus recommendation would be a Buy. The 12 month consensus stock price is $102.00. This implies a total return of 7.48% with 3.51% from dividends and $3.98 from capital gains. (See my blog for information on analyst ratings .)

It is interesting that recommendations are all over the place. It seems some analysts do not think that there will be much in the way of upside for bank stocks, including this stock. I will not be buying any more of this bank for the simple reason I already have enough of this bank and banks stocks currently in my portfolio. However, the price on this stock is at a reasonable level. See my spreadsheet at td.htm.

This is the second of two parts. The first part was posted on Thursday, January 16, 2014 and is available here.

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.

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.