Toronto-Dominion Bank (TSX:TD) has been a reliable performer through all kinds of market conditions. And 2025 has been no different as the TD stock has jumped by 17.3% so far this year to currently trade at $89.80 per share with a market cap of $158 billion. Also, it offers a reliable 4.7% annualized dividend yield at the current market price.
As the TSX continues to remain volatile due to global trade tensions and economic uncertainties, that kind of stability matters more than ever. As the second-largest Canadian bank, based on its market cap, prepares to report its fiscal second quarter of 2025 (the three months ended in April) earnings on May 22, investors are asking whether now is the time to jump in.
Before considering a pre-earnings move on TD stock, let’s walk through its recent earnings track record and what investors are watching for in the next release.
Why TD Bank stock is rallying in 2025
Several forces are at play behind TD Bank stock’s strong performance so far this year.
Part of the lift comes from the broader optimism across Canadian bank stocks. With the Bank of Canada now easing interest rates, borrowing costs are starting to come down. That’s great news for banks like TD because it could encourage more lending activity.
It’s also important to note that TD stock fell nearly 11% last year, underperforming most of its peers. One major reason for that was the U.S. probe into the bank’s anti-money laundering (AML) program, which hurt investor sentiment for months.
But the good news is that the issue is now settled. TD reached a resolution with U.S. regulators late last year and is already implementing improvements as part of the remediation process. That clarity seems to have eased one of the biggest concerns holding back TD stock.
Recent results show growing momentum
For the three months ended January 2025, the bank posted an adjusted net profit of $3.6 billion, nearly flat on a YoY (year-over-year) basis. However, its revenue jumped 10% sequentially to hit $14.1 billion, while earnings rose 17% sequentially to $2.02 per share.
Digging a bit deeper, its Canadian personal and commercial banking segment saw record revenue of $5.2 billion, driven by healthy loan and deposit volume growth. Meanwhile, its wealth management and insurance posted a 23% YoY surge in net income with the help of higher fee-based revenue and insurance premiums.
The bigger picture for long-term investors
Besides its improving financial growth trends, TD is actively addressing its U.S. anti-money laundering issues, as it has committed around US$500 million this fiscal year to strengthen governance and controls. While this has weighed on its U.S. retail segment’s earnings lately, it’s a clear sign that the bank is serious about turning the page.
In addition, the bank’s focus on the ongoing restructuring of its U.S. balance sheet could unlock stronger net interest income in the second half of the fiscal year.
So, if you’re looking for a reliable dividend stock to hold for the long term, TD’s steady fundamentals, improving U.S. operations, and strong capital position could make it worth considering, especially with the next earnings report just around the corner.
