Toronto Dominion Bank

Sound bite for Twitter and StockTwits is: Dividend Growth Bank. Stock price is fliting with the expensive range. Maybe best to wait for a better price, but that may take some time. This stock has a great long term total return with 40 year total return at 17.65% per year. Also, dividend increases over the past 40 years is at 11.4% per year. 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. When I sold some Metro in 2009, I bought this stock. It is the 3rd bank stock I bought. This is one of the big 5 banks of Canada. I think all Canadians should have at least one bank in their portfolio.

I have 40 years of dividend and stock price data on this stock. The returns and dividend growth over the past 40 years have been great for shareholders. This bank only kept dividends flat for one year in 2010. Compare this to BMO which kept dividends flat for 4 years from 2009 to 2012 inclusive. Note that BNS and National Bank also only kept dividends level for one year whereas Royal Bank and CIBC had dividends level for 2 years.

Dividend yield is moderate as is the dividend growth. Current dividend yields are at 3.20% with 5, 10 and historical median dividend yield at 3.71%, 3.71% and 3.50%. The dividend growth over the past 5, 10, 15, 20, 25, 30, 35 and 40 years are 10.21%, 8.34%, 10.03%, 11.22%, 10.58%, 10.83%, 10.08% and 11.37% per year. The one period under 10% is for the past 10 years and that is because the one year of flat dividends was within the past 10 years.

They can afford their dividends. The Dividend Payout Ratio for 2017 is at 42.7% and the 5 year covers is at 45.4%. The DPR for CFPS is 31.4% for 2017 and the 5 year coverage is 33.9%.

The long term total return is great and it is the reason everyone should have a Canadian Bank in their portfolio. The Total Return over the past 5, 10, 15, 20, 25, 30, 35 and 40 years are 15.73%, 11.05%, 14.00%, 12.05%, 20.62%, 14.43%, 15.82% and 17.65% per year. This is 31 of December to 31 of December. Total return includes both dividends and capital gains and this is a compounded rate. The 40 year total return at 17.65% is exceptional.

The total return over the past 5 and 10 years of 15.73% and 11.05% break down into 11.96% and 7.80% from capital gains and 3.78% and 3.25% from dividends.

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 ratios are 11.20, 12.65 and 13.76. The historical ratios are 11.40, 11.34 and 13.92. These are remarkable consistent. The current P/E Ratio is 13.54 based on a stock price of $74.90 and 2018 EPS estimate of $5.53. This stock price testing suggests that the stock price is relatively reasonable but above the median and very close to relatively expensive.

I get a Graham Price of $68.66. The 10 year low, median and high median Price/Graham Price Ratios are 0.86, 0.97 and 1.07. The current P/GP Ratio is 1.09 based on a stock price of $74.90. This stock price testing suggests that the stock price is relatively expensive.

The 10 year median Price/Book Value per Share Ratio is 1.61. The current P/B Ratio is 1.98 based on a Book Value of $69,807, BVPS of $37.89 and a stock price of $74.90. The current ratio is some 22.7% above the 10 year ratio. This stock price testing suggests that the stock price is relatively expensive.

The historical median dividend yield is 3.50%. The current dividend yield is 3.20% based on dividends of $2.40 and a stock price of $74.90. The current dividend yield is some 8.5% below the historical median. This stock price testing suggests that the stock price is relatively reasonable but above the median.

I get a 10 year median Price/Sales (Revenue) Ratio of 3.13. The current P/S Ratio is 3.81 based on 2018 Revenue estimate of $36,198M, Revenue per Share of $19.65 and a stock price of $74.90. The current ratio is some 21.7% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.

When I look at analysts' recommendations I find Strong Buy (3), Buy (5), Hold (6) and Underperform (1). They are sort of all over the place. The consensus would be a Buy. The 12 month stock price consensus is $78.00. This implies a total return of 7.34% with 4.14% from capital gains and 3.20% from dividends. This makes sense as price is relatively high.

Susan Portelance on Motley Fool talks about the bank's investment in AI. Canadian banks talk in this CTV News Report of the effect of US tax laws on them. This Globe and Mail article talks about Canada introducing new bank capital rules. See what analysts are saying about this stock on Stock Chase.

The Toronto-Dominion Bank and its subsidiaries provide financial products and services. It offers asset management, insurance, wealth management, investment banking, wholesale banking, personal banking and commercial banking services and others. Its web site is here Toronto Dominion Bank.

The last stock I wrote about was about was Calian Group Ltd. (TSX-CGY, OTC- CLNFF)... learn more. The next stock I will write about will be Bank of Nova Scotia (TSX-BNS, NYSE-BNS)... learn more on Monday, January 15, 2018 around 5 pm.

Also, on my book blog I have put a review of the book A World in Disarray by Richard Haass learn more...

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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.