Canada’s big bank stocks are a must-have for any Canadian investor. The banks offer growth, stability, and a growing, juicy income. Among those big bank stocks is TD Bank (TSX: TD). But is TD Bank a buy right now, or should investors seek out other options?
Let’s try to answer that.
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Meet TD Bank
TD is the second largest of the big banks and follows the same recipe that its peers (mostly) adhere to. A strong, stable domestic market that generates the bulk of its revenue. A growing international presence with an emphasis on the U.S. market. And then finally, a long-established and very stable quarterly dividend.
TD’s domestic arm continues to impress. In the most recent quarter, the segment reported a record net income of $1,953 million.
Turning to TD’s international (and more specifically, U.S.) presence is where things really get interesting. Its growing presence in the U.S., which currently stands at over 1,100 branches stretching from Maine to Florida, makes it a major player in that market.
More importantly, despite a hiccup in recent years related to the bank’s anti-money laundering remediation efforts, the bank is beginning to show some growth in that market.
In the most recent quarter, TD saw its U.S. retail business post net income of $956 million on an adjusted basis.
Collectively, both segments provide the bank with ample revenue to fund growth initiatives and pay out a tasty dividend.
But does a string of improving results make TD Bank a buy?
Let’s talk about that income
One of the main reasons why investors continue to flock to the big bank stock is for the juicy dividends that it offers. In the case of TD, that dividend works out to an impressive 4.07%.
The bank has also impressively paid out those dividends, without fail, for nearly two centuries. Finally, TD has continued to provide annual bumps to that dividend going back years.
For investors contemplating whether that makes TD Bank a buy, there’s one more point to note.
New investors need not drop tens of thousands into TD. Even an initial outlay of $7,000 will kickstart any long-term portfolio. More specifically, that $7,000 investment will generate a few new shares each year through reinvestments alone.
Long-term investors looking to supercharge their portfolio can augment that initial buy with additional annual or quarterly increases.
Perhaps best of all, investors looking to maximize that income in a tax shelter can opt to add TD to a TFSA, where those dividends will grow tax-free.
Final thoughts: Is TD Bank a buy for your portfolio?
So then, is TD Bank a buy? For all those reasons listed above and many more, yes.
TD Bank is an excellent long-term option for investors, and it is a buy right now. However, in my opinion, it’s not the stellar discounted buy that it was a year ago. The stock has performed great in the past year, rising a whopping 26% in the trailing 12 months.
Throw in a stable and growing quarterly dividend with nearly two centuries of payouts, and you have a solid option for any income or growth-seeking investor.
In my opinion, buy it, hold it, and watch your future income (and portfolio) grow.
