While the TSX Composite Index recently hit a new all-time high, not all investors are feeling at ease. Market momentum is strong, but underlying risks, from global trade friction to lingering inflation, are keeping many cautious. That’s why now is the perfect time to add a reliable, defensive dividend stock to your portfolio.
If I had $6,600 to invest today, I wouldn’t chase the latest high-flyer. Instead, I’d focus on income stability and capital preservation, and defensive dividend stocks could provide that crucial balance. In this article, I’ll reveal what I believe is the smartest defensive dividend stock to buy right now with $6,600 and why it could serve as the anchor your portfolio needs through any economic cycle.
The smartest defensive dividend stock to buy
With so much noise in the market, it could be a smart move to look at companies with stable operations and dependable income. That’s exactly why I’m picking Toronto-Dominion Bank (TSX:TD) as the smartest defensive dividend stock to buy now.
It’s one of Canada’s largest banks with operations across North America. The bank serves millions of customers through personal banking, business banking, wealth management, and capital markets. After climbing 22% over the last year, TD stock is trading at $92.91 per share with a market cap of $161.3 billion. It offers a quarterly dividend with an annualized yield of around 4.5%.
Holding strong even during economic uncertainty
Now, let’s try to connect that performance to what’s happening under the hood. In the second quarter (ended in April) of its fiscal year 2025, TD posted adjusted earnings of $1.97 per share, beating Street analysts’ expectations of $1.76 per share. While that’s a slight drop from a year ago, it’s still a strong figure given the tough economic conditions, inflationary pressures, and compliance costs in the United States.
In its home market, the bank’s core personal and commercial banking business continued to grow. The segment’s revenue rose 3% YoY (year over year) as loan and deposit volumes increased. Even with higher loan loss provisions and operating costs, TD’s Canadian unit reported over $1.6 billion in profit for the quarter.
On the U.S. side, TD is navigating through restructuring and regulatory improvements, including a massive $500 million investment this year to enhance anti-money-laundering systems. Despite these challenges, the bank managed to deliver its sixth straight quarter of consumer deposit growth and saw a double-digit boost in U.S. wealth assets.
Investing today for a stronger tomorrow
Notably, TD Bank is making smart moves to trim costs and refocus on high-return areas. The bank’s new restructuring plan is expected to cut roughly 2% of the workforce and save up to $650 million annually. At the same time, it’s focusing on improving its digital banking capabilities and investing in risk management to protect and grow its business in the long term.
Given these strong fundamentals, for any investor looking for a defensive dividend stock to buy, TD checks all the right boxes with consistency, resilience, and long-term value.
