Toronto Dominion Bank

Sound bite for Twitter and StockTwits is: Buy for income/cap gains. This has been a great dividend growth stock for me. I note that analysts do not expect much more increase in the stock price over the next year. Analysts' recommendations are really all over the place. Price seems a little high, but not unduly high. Dividend yield is still good. See my spreadsheet on 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. The banks were taken off the Canadian Dividend Aristocrats Index when dividend growth stalled in 2009/10, but most are back on this list except for BMO. When I sold some Metro in 2009, I bought this stock. It is the 3rd bank stock I bought after BMO and RY.

This bank did fairly well out of the 2008 recession where it only stopped dividend growth for one year in 2010. Dividend growth picked up after that. The last dividend increase was in 2016 and it was for 7.8%. The total dividend increase between 2015 and 2016 was 8%. The 5, 10 and 15 dividend growth is at 10.60%, 9.27% and 9.62% per year.

For this stock the dividend yield is moderate as is the dividend growth. The dividend yield currently is at 3.31%, the historical median dividend yield is 3.48% and the 5 year median dividend yield is 3.75%. The dividend yield is after 5, 10 and 15 years for this stock at 5.7%, 6.3% and 12.5% respectively based on an original median stock price. If dividends increase in the future at 10.6%, then in 5, 10 or 15 years, the dividend yields could be 5.48%, 9.06% and 15.00% based on the current stock price of $66.48.

The Dividend Payout Ratios are good for this stock. Canadian Banks stock should have DPR of between 40% and 55% of EPS. This stock's DPR for EPS for 2016 is 46.3%. The 5 year running average is 45.7%.

Shareholders have been making money from this stock. The 5 and 10 year total return to the end of 2016 is 15.44% and 9.77% per year. The portion of this total return attributable to dividends is 3.78% and 3.14% per year for the past 5 and 10 years. The portion of this total return attributable to capital gain is 11.66% and 6.63% per year for the past 5 and 10 years.

I see nothing that particularly sticks out on this bank. The debt ratios are with normal parameters for a bank. This bank has generally produced good returns for its shareholders and has provided shareholders with a nice and growing dividend. It is a dividend growth stock.

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.40, 12.63 and 13.69. The corresponding 10 year values are 11.41, 12.68 and 13.88. The historical values are 11.40, 10.89 and 13.92. These are all pretty consistent. The current P/E Ratio is 12.88 based on a stock price of $66.48 and 2017 EPS estimate of $5.16. This stock price test suggests that the stock price is relatively reasonable but above the median.

I get a Graham Price of $64.70. The 10 year low, median and high median Price/Graham Price Ratios are $0.86, 0.98 and 1.08. The current P/GP Ratio is 1.03 based on a stock price of $66.48. This stock price test suggests that the stock price is relatively reasonable but above the median.

The 10 year median Price/Book Value per Share Ratios is 1.61. The current P/B Ratio is 1.81 a value some 12.4% higher. The current P/B Ratio is based on BVPS of $36.69 and a stock price of $66.48. This stock price test suggests that the stock price is relatively reasonable but above the median.

The current dividend yield is 3.31% based on dividends of $2.20 and a stock price of $66.48. The historical median dividend yield is 3.48% a value some 4.9% higher. This stock price test suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform Recommendations. Most of the recommendations are a Buy or Hold and the consensus is a Buy. The 12 month stock price is $67.02. This implies a total return of 4.12% with 3.31% from dividends and 0.81% from capital gains. This is based on a current stock price of $66.48.

Wayne Landers on Sports Perspectives talks about CSFB raising their 12 month stock target price from $69.00 to $72.00 for this bank. Will Ashworth of Motley Fool does not think that TD Bank deserves the Outperform Rating from Macquarie Research analyst Jason Bilodeau. Staff writers on Wall Street Beacon talk about TD bank beating earnings consensus for the October 2016 quarter. See what analysts are saying about this bank at Stock Chase.

The last stock I wrote about was about was Sylogist Ltd (TSX-SYZ, OTC-SYZLF)...learn more . The next stock I will write about will be Bank of Nova Scotia (TSX-BNS, NYSE-BNS)... learn more on Friday, January 20, 2017 around 5 pm. Tomorrow on my other blog I will write about Bond Market Bear... learn more on Thursday, January 19, 2017 around 5 pm.

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 Toronto Dominion 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. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.