Toronto-Dominion Bank (TSX:TD) has long been one of the top banks in Canada. It’s currently in second place as the largest bank by market capitalization and tied for first in terms of assets under management.
Yet there are more reasons to consider TD Bank stock for your portfolio — especially considering long-term growth. So, let’s get right into it.
A history of company growth
During the last decade, TD Bank stock has been growing by leaps and bounds. The bank was well known for offering the most options for its clients, bringing in every level of income and providing every type of loan offering. Yet, in the last few years, it’s been putting its cash to work.
This has come in several ways. First, TD Bank stock grew rapidly in the United States. As of writing, it remains one of the top 10 banks in the country! This is huge for those worried about economic downturns. While TD Bank stock will be susceptible to the drops in the U.S. economy, some quite severe, the U.S. economy rebounds very quickly after recessions. So, this opens the door to quick growth for TD Bank stock.
Furthermore, the company has been growing its business operations as well. The stock is now the number one card issuer in Canada; therefore, it should remain dominant for many years to come. Once the credit card acquisitions and portfolios have matured, they could create a high-return business.
More to come
With lower-cost alternatives for its consumers, growth in the United States, and credit card portfolio growth, it’s hard to see where else TD Bank stock could grow. However, one of the top ways is through acquisitions.
That being said, the acquisition of First Horizon Bank unfortunately fell through for the company. Yet analysts were pleased, feeling the deal didn’t add value for the overall company portfolio. Plus, it managed to acquire Cowen recently, with long-term growth certainly on the horizon for the stocks.
The key here will be patience for investors. TD Bank stock, of course, is still going through the current poor market performance from high interest rates and inflation. However, at present TD Bank stock benefits more than its peers from higher interest rates. As the market recovers, it should balance out, surging back to normal growth.
What we can expect
All the major banks missed analyst estimates during the last earnings report. This could indeed happen again during the next earnings report, with higher interest rates leading to lessened loan growth — something TD Bank stock would need.
However, this could create an opportunity for value investors. TD Bank stock remains a strong long-term option with growing dividend income. Shares remain down 3.36% in the last year as of writing and trade at just 10.42 times earnings. Furthermore, it offers a 4.6% dividend yield investors can latch onto.
Overall, TD Bank stock is a strong choice for investors looking for long-term growth at a great price. And as one of the biggest banks in Canada, you can likely look forward to that growth for decades to come.
