Sometimes the best dividend buys show up wearing a frown. When a dividend stock drops, the crowd starts whispering, and that noise can hide a very simple truth. If the cash keeps coming in, the dividend can keep going out.
A stock set to beat the TSX again and again usually has three things: a business Canadians keep using, a dividend that grows with earnings, and a balance sheet that can handle a few economic potholes. Add a sensible price tag, and a temporary slump can turn into a long-term gift.
Source: Getty Images
TD
Toronto-Dominion Bank (TSX:TD) remains one of Canada’s most important financial engines. It runs a massive Canadian banking franchise, a large U.S. footprint, and a capital markets business that can shine when activity improves. That mix gives it multiple ways to earn money, which matters when one line of business slows. It also has a reputation for consistency, and consistency is the quiet secret behind most great dividend stories.
Recent performance has been a reminder that even safe can feel bumpy. The share price has moved through a choppy stretch, with swings tied to rate expectations, credit concerns, and a wave of bank fatigue from investors who want growth instead of patience. Even so, the dividend stock has shown resilience. When fear eases, buyers tend to come back quickly, because TD still looks like a core holding that can recover without needing a miracle.
Into earnings
On the earnings front, TD’s fiscal fourth quarter of 2025 delivered a mixed but encouraging message. It released results on December 4 for the year ended October 31, showing solid revenue momentum in core banking, even as expenses and provisions demanded attention for long-term holders.
Reported earnings came in at $3.3 billion, down 10% from a year earlier, while adjusted earnings rose to $3.9 billion, up 22%. Adjusted diluted earnings per share (EPS) reached $8.37, up from $7.81. That gap between reported and adjusted results tells you the quarter included notable items, but the underlying machine still generated strong profit.
Valuation also looks more reasonable than it often does for a Canadian banking blue chip. TD recently traded around a low-double-digit trailing price-to-earnings multiple, with a forward multiple in the mid-teens. The dividend is supported by a stable payout ratio, providing a strong dividend yield as well. TD also ended fiscal 2025 with a strong capital position, including a Common Equity Tier 1 ratio of 14.7%, which provides a cushion if the economy softens.
Looking ahead
So, can TD beat the TSX again and again as a dividend stock? It can, because it has two levers that matter for long-term total returns: compounding dividends and steady capital return. TD keeps growing its dividend over time, and it has room to support buybacks when conditions allow. It also benefits when interest rates settle into a more normal pattern, since stability helps margins, planning, and investor confidence. In a market that often overreacts, that boring steadiness can quietly win.
Still, a forever-income case needs honest caveats. TD faced heavy scrutiny around U.S. anti-money laundering compliance, including a record fine and ongoing oversight, which can raise costs and distract management. Credit losses can also rise if unemployment climbs or households strain under debt, and a bank never controls that cycle. If earnings growth slows, dividend growth can slow too, even if the dividend stays safe.
Bottom line
Here’s the simple takeaway. TD does not need to be exciting to beat the TSX over decades. It needs to keep doing what it has always done, which is earn through cycles, protect capital, and send shareholders a growing cheque. Right now, here’s what even $7,000 could bring in each year.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL ANNUALPAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| TD | $129.16 | 54 | $4.32 | $233.28 | Quarterly | $6,974.64 |
If the stock feels unloved at times, that can be the entry point which makes the long-term results look even better. For investors chasing lifetime income, TD still deserves a front-row seat, as long as expectations stay realistic and patience stays in the driver’s seat today.
