Valued at a market cap of $194 billion, Toronto-Dominion Bank (TSX:TD) is among the largest companies in Canada. In the last 10 years, TD Bank stock has returned 107% to shareholders, and after adjusting for dividend reinvestments, cumulative returns are closer to 215%.
Despite these outsized returns, TD Bank offers you a tasty dividend yield of 3.9%, given its annual dividend per share of $4.21 in fiscal 2025 (ended in October). So, for you to earn $1,000 in annual dividends, you need to own 238 shares of the banking giant worth an investment of more than $27,000 today.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| TD Bank | $113.72 | 238 | $1.0525 | $250.49 | Quarterly |
While TD Bank is part of a cyclical sector, the company has raised its annual dividend from $2.16 per share in 2016 to $4.21 per share in 2025. Analysts forecast the payout to increase to $4.55 per share in 2029.
Back in November 2016, you would have had to purchase 463 TD shares worth $27,645. Today, 463 TD stock would help you earn $1,950 in annual dividends, enhancing the yield at cost to more than 7%.
Let’s see if you should own TD Bank stock right now.
Is TD Bank stock still a good buy right now?
Toronto-Dominion Bank is executing a sweeping transformation aimed at reclaiming its position as a top-performing Canadian lender after years of declining performance.
CEO Raymond Chun outlined an ambitious plan at the bank’s investor day to boost return on equity to 16% by fiscal 2029 while restructuring the organization’s cost base.
The strategy represents a decisive pivot for TD, which has seen its ROE (return on equity), earnings growth, and shareholder returns lag behind those of its peers in recent years.
The bank is targeting $2 billion to $2.5 billion in annual cost savings through a comprehensive program that touches every aspect of its operations. TD aims to pursue structural changes through distribution transformation, automation, the deployment of artificial intelligence, and vendor consolidation.
The company expects to achieve a mid-50s efficiency ratio, down from the current 58%, with positive operating leverage each year. For fiscal 2026 specifically, TD is guiding to 3% to 4% expense growth and a 13% ROE as the transformation gains momentum.
Chief Risk Officer Ajai Bambawale emphasized the bank’s credit quality remains strong despite economic uncertainty from tariffs and trade tensions.
TD has built $600 million in reserves over three quarters to address potential impacts, including over $400 million for industries exposed to tariffs and nearly $200 million for consumer impacts. The bank’s real estate secured lending portfolio shows resilience with an average credit score of 792, and only 1% of borrowers have scores below 650, combined with loan-to-value ratios above 75%.
Regarding the 2026 rate reset period, when 29% of mortgages mature, Bambawale noted that 64% of customers will see lower payments, while 93% of those facing higher payments remain within stress test thresholds.
Is TD Bank stock undervalued right now?
Analysts tracking TD Bank stock forecast adjusted earnings per share to increase from $7.81 in fiscal 2024 to $11 per share in fiscal 2029. Today, TD Bank stock trades at 13.2 times forward earnings, which is higher than its five-year average of 10.9 times.
If TD Bank stock reverts to its historical mean, it should trade around $121 in October 2028, indicating an upside potential of 8%. If we adjust for dividends, cumulative returns could be closer to 20%.
