Shares of Toronto-Dominion Bank (TSX:TD), or TD Bank, have been on fire lately, surging nearly 73% over the last year. With this, the stock now trades at $127.99 per share, giving it a market cap of nearly $216 billion.
Moves like this tend to split investors into two camps. One side feels excited about the momentum. The other side worries the stock has already peaked. TD Bank stock sits right at the centre of that debate today.
But behind TD’s rising share price is a business that continues to generate stable profits, reward shareholders with quality dividends, and strengthen its balance sheet. For investors thinking long term, the bigger picture matters more than the short-term price swings. In this article, I will highlight three reasons why TD stock could still make sense for long-term investors.
Source: Getty Images
TD Bank’s powerful core banking business
To put it simply, TD Bank operates in Canadian personal and commercial banking, U.S. retail banking, wealth management, insurance, and wholesale banking. The recent rally in its stock could mainly be attributed to its consistently improving financials.
In the fourth quarter of its fiscal year 2025 (ended in October), the bank’s Canadian personal and commercial banking division delivered record revenue of $5.3 billion. That growth was primarily backed by higher loan and deposit volumes across personal and business customers.
As a result, TD’s adjusted earnings for the quarter came in at $2.18 per share, rising nearly 27% on a YoY (year-over-year) basis. This solid engine helps TD Bank stock stay resilient even when economic conditions remain volatile.
Earnings strength and dividends backed by solid capital
For long-term investors, profits for a business matter even more when that company can protect those profits from short-term risks and share them through dependable dividends.
In its fiscal 2025, TD generated adjusted net profit of $15 billion while maintaining a common equity tier 1 capital ratio of 14.7%. That capital strength gives the bank room to manage risk, continue investing in operations, and return cash to shareholders.
Interestingly, TD Bank stock currently offers an annualized dividend yield of about 3.4%, paid quarterly. For long-term investors, that reliable income stream could add an extra layer of confidence while holding it through market cycles.
A clearer strategy supports the recent momentum
The recent run in TD Bank stock is also supported by its continued focus on sharper execution. During its fiscal 2025, the bank completed a broad strategic review focused on deeper client relationships, simpler operations, and disciplined capital use.
Its wealth management and wholesale banking segments delivered record revenue in the latest quarter, showing that TD’s growth is not limited to traditional lending alone. While its stock price can fluctuate in the short term, this trend supports the idea that it’s moving higher on progress inside the business rather than hype.
Foolish takeaway
TD Bank stock has a solid track record of rewarding investors with strong gains, and its long-term case still holds weight.
With its shares currently trading at an all-time high and delivering a reliable dividend with consistent earnings power, TD stock continues to offer stability with growth potential. For investors focused on patience rather than timing the market, this Canadian banking giant is definitely worth considering right now.
