When investors start worrying about bear markets, the instinct is often to run. But sometimes the smarter move is to lean into strength. That’s where Toronto-Dominion Bank (TSX: TD) comes in. Trading at about $102 per share, TD has climbed more than 26% in the past year, even while the financial sector faced volatility. With fresh quarterly results on the table, this bank is proving it’s the kind of Canadian stock worth buying when others hesitate.
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1. Earnings
The first reason to consider TD in a downturn is resilience. Reported earnings exploded in the second quarter (Q2) of 2025, rising to $11.1 billion from just $2.6 billion a year earlier. That headline gain came from the sale of its Schwab stake, but adjusted net income of $3.6 billion still shows the underlying business remains strong. That’s only a 4% dip from last year.
Canadian personal and commercial banking kept growing, with deposits and loans both up. Auto lending and small business banking hit records, proving that even in a slower economy, TD has deep channels of growth.
2. Beyond borders
The second reason is diversification. TD isn’t just a Canadian retail bank. Its U.S. operations, while facing restructuring costs, are still delivering growth in consumer deposits and wealth assets. Its wholesale arm just logged record revenue, including fees tied to the Schwab sale — all while also pulling off the largest sole-managed convertible offering in the U.S. since 2020.
And wealth and insurance delivered a 14% earnings bump, powered by strong premium growth and TD Asset Management’s new infrastructure fund. That mix gives TD a broad base of revenue, so no single headwind can bring it down.
3. Income
The third reason is capital strength and dividends. TD’s common equity tier-one ratio stands at a rock-solid 14.9%, meaning it can weather downturns while still rewarding investors. The Canadian stock pays a forward annual dividend of $4.20 per share, a yield of just over 4% at writing, with a payout ratio below 45%. That combination of safety and income is exactly what long-term investors crave when markets get choppy. And right now, that dividend could earn investors $285 annually from a $7,000 investment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| TD | $101.83 | 68 | $4.20 | $285.60 | Quarterly | $6,923.44 |
Foolish takeaway
Of course, there are challenges. U.S. retail banking earnings took a hit from restructuring charges and higher provisions for credit losses, while governance and compliance costs continue to weigh. Adjusted earnings dipped slightly year over year, reflecting those pressures. But viewed through a long-term lens, these are investments in strengthening the bank, not signs of weakness.
That’s why bear market fears can actually make TD even more attractive. With its scale, diversification, and commitment to shareholders, the Canadian stock offers a rare blend of stability and upside. Markets may lurch up and down, but owning TD means owning a bank that can thrive on both sides of the border, pay you to wait, and adapt for the future. If you’re nervous about where markets are heading, this is one Canadian stock you might want to buy like there’s no tomorrow.
