Canada’s big banks are some of the best long-term investments for any portfolio. There’s a good reason for that view. The banks offer a reliable revenue stream, stable growth, and a juicy income. And right now, TD (TSX: TD) is emerging as the one bank stock investors should consider.
Here’s a trio of reasons why TD Bank stock may be the one big bank stock your portfolio needs right now.
Reason #1: TD is a well-diversified growing option
TD is the second largest of Canada’s big banks. What few investors may realize, however, is that the bank has a larger branch network outside of Canada. Specifically, TD operates a massive and growing network in the U.S.
That U.S. network is a great example of TD’s focus on growth. Following the Great Recession, TD acquired several smaller regional banks, stitching them together under a single banner. Today, that network boasts over 1,100 locations stretching from Maine to Florida.
That diversified network provides an alternative revenue stream for the company during earnings season. In the most recent quarterly update, TD reported an adjusted net income of 2,886 million, of which $1,280 million came from that U.S. presence.
That fact alone makes TD Bank stock an intriguing option for investors looking for a long-term growth pick.
Reason #2: A juicy income comes standard
One of the most compelling reasons why investors continue to flock to TD Bank is for the juicy dividend that it offers. As of the time of writing, TD offers an appetizing quarterly dividend that pays out a yield of 5.13%
For prospective investors with $30,000 to allocate towards TD stock, that dividend works out to an income of just over $1,530. Additionally, investors who aren’t ready to draw on that income just yet can reinvest it until needed. This allows any eventual income to grow until needed thanks to reinvestments.
Speaking of growth, investors can also take solace in the fact that TD has an established precedent of paying out dividends going back nearly two centuries. Even better, the bank has also provided investors with annual bumps to that dividend going back over a decade.
Reason #3: Now is the time to buy TD Bank
Apart from that juicy dividend, another great reason to buy TD Bank stock right now comes down to the current stock price. As of the time of writing, TD is trading down 14% over the trailing 12 months.
That decline has pushed the stock price down to just over $79, which is close to the bank’s 52-week low. It also means that the bank trades at an attractive price-to-earnings ratio of just 14.19.
Much of that decline can be attributed to the interest rate hikes we’ve seen over the past year, which forced all banks to increase loss provisions.
In other words, long-term investors contemplating TD as part of their portfolio can pick up the stock at a great discount right now.
Final thoughts
No stock is without some risk, and that includes TD Bank stock. Fortunately, TD’s growing exposure to the U.S. market, stable domestic arm, and juicy dividend make it a must-have for any well-diversified portfolio.
