I don’t usually buy a stock thinking about whether my kids might own it one day, but Toronto-Dominion Bank (TSX: TD) seems different. I already own TD, and when I look decades ahead, I can imagine keeping these shares in the family rather than eventually looking for an exit.
The bank serves millions of clients, has roughly $2.1 trillion in assets, and operates across Canadian and U.S. banking, wealth management, and capital markets. That scale gives it several ways to keep growing through different economic cycles.
While TD stock has already climbed about 61% over the last year, the continued strength in its earnings across several major businesses makes me think there could still be plenty of long-term upside ahead.
Let me explain why TD is a Canadian bank stock I’m comfortable owning for decades and could eventually pass onto my kids.
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Why I’m holding TD for the long term
At the time of writing, TD stock traded at $166.18 per share with a market cap of $272 billion. At that current price, it also offered a 2.7% annualized dividend yield.
The stock’s impressive performance in recent years could mainly be attributed to the improving earnings growth across several important parts of its business. In the third quarter of fiscal year 2026 (ended in July), TD’s net income jumped about 38% year-over-year (YoY) to $4.6 billion.
That strength was broad-based as its Canadian personal and commercial banking division posted record earnings of about $2.1 billion, up 7% YoY, as revenue rose 5%. Higher loan and deposit volumes, along with stronger margins, supported that growth.
Similarly, TD’s U.S. banking business also showed better momentum, with the segment’s reported net income climbing 41% YoY, helped by balance sheet restructuring activities and stronger loan and deposit margins. Meanwhile, its wealth management and insurance segment delivered record earnings of $841 million, up 20% YoY.
Why I’m comfortable owning TD for years
Since I already own TD and plan to eventually pass the shares on to my kids, I’m less focused on short-term quarterly results. What matters more to me is whether TD is investing now to strengthen its competitive position over the long run.
Interestingly, the bank continues to spend on front-line talent, artificial intelligence (AI), digital tools, and initiatives designed to deepen client relationships.
At the same time, TD is investing in its U.S. franchise, as it plans to open 100 new U.S. stores by the end of calendar year 2028.
That said, one near-term risk remains on my radar as a TD shareholder. The bank is still working to strengthen its U.S. Bank Secrecy Act and anti-money laundering program, with fiscal 2026 remediation and related governance and control investments projected at roughly US$550 million before tax. Significant work remains through calendar 2027, and the process could extend beyond that depending on regulatory reviews and additional remediation needs.
Despite those challenges, TD remains well capitalized. Its Common Equity Tier 1 ratio was 14.3% in the latest quarter, providing ample room to serve clients, continue investing in growth, and return excess capital to shareholders.
Overall, TD checks many of the boxes I want from a long-term investment. It has significant scale, diversified sources of earnings, improving profitability, a dividend, and a willingness to keep investing for the future. As an existing shareholder, I still see TD as an attractive Canadian bank stock to own for decades and pass onto my kids.
