Friday, January 16, 2015

Toronto Dominion Bank

I own this stock of Toronto Dominion Bank (TSX-TD, NYSE-TD). This stock, as all banks, was on Mike Higgs' Canadian Dividend Growth Stock list and the other dividend lists that I followed. When I sold some Metro in 2009, I bought this stock. It is the 3rd bank stock I bought.

This bank also just held the dividend payments steady for two years of 2009 and 2010. The 5 and 10 years dividend growth is at 5.6% and 10.5% per year. With the 5 year median dividend at 3.52% we have a stock with a good dividend with moderate increases. Also when this bank again started to increase the dividends, they started with quite good increases. The last dividend increase was in 2014 and it was for 10.6%. This bank is also currently increasing the dividends twice each year.

The Dividend Payout Ratio is good for this bank with a 5 year median DPR for EPS at 44.4%. The DPR for EPS for 2014 was also at 44.4%. One way of judging a company is how much of the original stock price has been paid by dividends. I have had this bank from almost 15 years and dividends cover some 45% of my original cost. Part of the reason is that I have had several stock purchases over the years. If you look at just the stock I bought almost 15 years ago, dividends cover some 125% of my original cost.

I have held this stock for almost 15 years and I have a total return of 14.76% per year with 11.37% from capital gains and 3.39% from dividends. Over the past 5 and 10 years to date this bank has not done as well with the 5 and 10 year total return at 9.97% and 8.53% with 6.14% and 5.05% from capital gains and 3.83% and 3.48% from dividends. For this bank the stock prices hit a low in 2009.

Because the outstanding shares have been increasing by 1.5% and 3.5% per year over the past 5 and 10 years the "per share" values, like Revenue per Share and EPS are more important to me as a shareholder than Revenue and Earnings.

For this company Revenue per Share and EPS have done well over the past 5 and 10 years with Revenue per Share up by 9.3% and 7.2% per year over the past 5 and 10 years. EPS has increased by 27.7% and 9.34% per year over the past 5 and 10 years. For this bank EPS hit a low in 2009 however revenue did not hit any lows with the 2008 bear market and subsequent recession.

By the way, revenue is up by 10.9% per year over the past 5 and 10 years. Net Income is up by 20.9% and 13.1% per year over the past 5 and 10 years.

For this bank, the Return on Equity has not been below 10% over the past 10 years. However, it has been lower in 3 years in the past 10 years. The Debt Ratio is at 1.06 which is the same as for Bank of Montreal (TSX-BMO) and Royal Bank (TSX-RY).

Sound bite for Twitter and StockTwits is: Bank Dividend Growth Stock. I think that everyone should have some exposure to banks and the financial sector. All the big Canadian banks are Dividend Growth Stock. See my spreadsheet at td.htm.

This is the first of two parts. The second part will be posted on Monday, January 19, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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 Bank.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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