When a stock slips, it can be hard to pick it up. After all, it fell for a reason. However, those falls can be the best time to buy — especially when it’s a stable and steady investment in a Canadian bank that’s been around for decades. It remains one of the largest banks in the country.
Let’s dive into the scene. Today, Toronto-Dominion Bank (TSX: TD) is back near 52-week highs. Yet it’s still off from its five-year highs of around $107. Furthermore, it’s worth remembering that TD stock isn’t just any banking stock. It anchors Canada’s Big Five, with over $2 trillion in assets, $22.9 billion in quarterly reported revenue and a global presence reaching both coasts and beyond.
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Into earnings
TD’s second‑quarter earnings recently landed, revealing some strong and some more challenging trends. The bank delivered reported net income of a whopping $11.13 billion, but that included a one‑time $8.6 billion gain from selling its Schwab stake. Excluding that, adjusted earnings came in at $3.63 billion, slightly down from $3.79 billion a year earlier. So, adjusted diluted earnings per share are $1.97, a small dip from $2.04. That’s leaner growth, but still solid profitability.
Digging deeper, TD’s Canadian personal and commercial banking arm saw revenue up 3% thanks to loan and deposit volume growth, though provisions for credit losses rose, trimming net income by 4% year over year. Its U.S. retail operations are in the midst of a balance‑sheet restructuring, which hit Q2 results hard. Reported U.S. net income dropped 76%, or 77% in U.S. dollars, largely due to this transition. But on an adjusted basis, income was still nearly $967 million, down 19%. TD stock is investing heavily in its U.S. compliance and afternoon‑balance rebalancing, which temporarily hurts profit but should help in the long run .
So, why buy?
Here’s the case for buying and holding TD stock. TD’s common equity tier-one capital ratio sits at a strong 14.9%, well above regulatory requirements . That gives it room to invest in digital, grow its U.S. operations at a deliberate pace, and return cash to shareholders via dividends. Indeed, the dividend yield sits around 4%, and the payout ratio is about half of adjusted earnings, signalling room for raises or special distributions if earnings recover.
TD stock faces some questions, of course. Its U.S. restructuring will continue to weigh on earnings through the next several quarters. Meanwhile, provisions against credit losses have trended higher, in part due to uncertainty in trade and economic conditions. And TD was hit by fines and remediation costs tied to its U.S. AML (anti‑money‑laundering) controls. These aren’t trivial risks. Still, they’re known and are being dealt with.
Considerations
On the flip side, TD is leaner post‑Schwab, with capital freed up, and focused on core growth, particularly in Canada’s booming mortgage and commercial lending markets, and in U.S. wealth and retail. Plus, the dividend alone offers a cushion during this lull.
Today’s investment gives a reasonable entry point for patient investors. Buying now means getting stock in a diversified Canadian powerhouse at a moderate discount, with a stable Canadian footprint, growing U.S. presence, and strong capital and income streams. That said, investors should be ready to watch earnings rebound over 2026 to 2027 as restructuring abates and credit provisions stabilize. If global or Canadian economies slow faster than expected, or if restructuring drags on, patience may be tested.
Bottom line
In short, TD Bank remains one of those rare Canadian stocks that combine scale, dividend income, capital strength and strategic growth investments at home and abroad. And with the stock down, now is a smart time to consider adding to or beginning a position, ideally for life.
