Thursday, January 16, 2014

Toronto Dominion Bank

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.

The TD bank did very well in the economic problems of 2008 and only had 1 year of no dividend increases which was in 2010. The 5 and 10 year growth in dividends are at 6.54% and 10.82% per year over the past 5 and 10 years. This bank tends to do small increases several times a year. The last increase was for 1.2% for the first dividend of the 2014 financial year. However, in 2014 dividends are up so far by 6.17% over the 2013 financial year. On my original investment in 2000, I am earning a dividend yield of 9.58% and on my investment in 2009; I am earning a dividend yield 7.21%.

This bank has also done well lately with the 5 and 10 year total returns at 22.71% and 12.55% per year. The dividend portion of these returns was at 4.54% and 3.55% per year over these periods. The capital gains portion of these returns was at 18.17% and 9% per year over these periods.

Outstanding shares have increased by 2.6% and 3.4% per year over the past 5 and 10 years. Shares have increased due to DRIP, Stock Options and Share Issues. Shares have decreased due to Buy Backs. Growth in Revenue, Earnings and Cash Flow has been fine to good.

Revenue per Share has increased by 10.4% and 7% per year over the past 5 and 10 years. However, if you look at the 5 year running averages, the increases are lower at 6.4% and 4.6% per year. The EPS has increased by 7.3% and 16.4% per year over the past 5 and 10 years. Again, looking at the 5 year running averages the increases are lower at 3.5% and 11% per year.

Cash Flow per Share has increased by 7% and 7.2% per year over the past 5 and 10 years. The 5 year running averages show a bit different story with 5 and 10 year increases at 10.4% and 5.9% per year. (Comparing data from exactly 5 and 10 years ago and comparing data from using 5 year running averages over the past5 and 10 years can tell you different things. However, looking at the data on my spreadsheet, you can see that this bank has done well in growth over the past 5 years.)

For most years the Return on Equity is over 10%. The ROE for the 2013 financial year is 12.8% and the 5 year median ROE is 11.8%. The ROE on comprehensive income is slightly better with an ROE for the 2013 financial year at 13.1% and with a 5 year median at 12.5%.

Debt ratios look good and as with the other two banks I reviewed, the Debt, Leverage and Debt/Equity Ratios are now better than in the past. The Liquidity Ratios looks fine at 1.80. However, as I have mentioned, few analysts look at this ratio. The Debt Ratio is 1.06 which is typical currently for banks. The Leverage and Debt/Equity Ratios of 16.60 and 15.60 are better than in the past as these ratios were closer to 20.00 and 19.00 prior to 2008.

I am pleased with my investment in this stock. This bank is currently growing well. See my spreadsheet at td.htm.

This is the first of two parts. The second part will be posted on Friday, January 17, 2014 and will be 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.

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