Shares of Bank of Nova Scotia (TSX:BNS), or Scotiabank, jumped 5% in early trading on Tuesday after its latest earnings report came out, and investors had plenty to like in the numbers. The bank delivered a record quarter, with stronger results across all major business lines, improving margins, and return on equity moving above its medium-term target.

While BNS stock has already enjoyed a solid run over the last year, this broad-based strength across the business in the latest quarter gives those gains stronger earnings support.

In this article, I’ll break down Scotiabank’s third-quarter results and what they mean for investors.

Why Scotiabank stock jumped after its third-quarter earnings release

As one of Canada’s largest banks, Scotiabank’s operations include Canadian banking, international banking, and global wealth management. After the recent rally, BNS stock now trades close to $126 per share, giving the bank a market cap of over $148 billion. Notably, it also offers an annualized dividend yield of roughly 3.7%.

Despite some recent market volatility, the stock jumped more than 50% in the last year, making it one of the top-performing bank stocks on the TSX.

The recent strength in BNS stock could be easily understood when you see how many parts of the bank are continuing to contribute to growth.

In the third quarter of its fiscal year 2026 (ended in July), Scotiabank’s revenue climbed 11.1% year-over-year (YoY) to $10.5 billion. Its adjusted net profit reached nearly $3 billion, up about 18% YoY and 12.5% from the second quarter. The bank’s adjusted diluted earnings rose 21% YoY in the latest quarter to $2.28 per share.

More importantly, Scotiabank’s profitability is continuing to move in the right direction. In the third quarter, its adjusted return on equity improved to 14.2% from 12.4% a year earlier, pushing it above the bank’s 14% medium-term target.

Similarly, its Canadian banking division’s earnings rose 12% YoY to about $1.1 billion, supported by record revenue, a fifth consecutive quarter of margin expansion, and strong fee income growth. Meanwhile, the bank’s global wealth management delivered a record quarter, with earnings climbing 23% from a year ago with the help of higher mutual fund fees, brokerage revenue, and net interest income.

What investors should watch now?

These strong earnings clearly make BNS stock more appealing, but investors should still watch Scotiabank’s credit trends before investing.

In the latest quarter, the bank’s provision for credit losses climbed to about $1.1 billion from roughly $1 billion a year ago. Still, that figure improved sequentially by $138 million from the second quarter.

Interestingly, Scotiabank returned $6.3 billion to shareholders through dividends and share buybacks in the first nine months of its fiscal 2026.

Overall, Scotiabank’s stronger profitability, broad earnings growth, improving margins, and continued capital returns make BNS stock attractive after this third-quarter report. Although the shares have already enjoyed a strong rally lately, these latest results give investors solid reasons to believe the bank’s earnings momentum still has support behind it.

The post Scotiabank Just Reported Q3 Results: Here’s What Investors Need to Know appeared first on The Motley Fool Canada.

More reading

• The Best Canadian Bank Stocks for Dividends in 2026
• These 2 TSX Stocks Give You Both Income and Growth
• 3 Blue-Chip Dividend Stocks I’d Buy Without Hesitation
• TFSA Investors: 2 Canadian Stocks to Hold for the Long Run
• 3 Canadian Stocks That Keep Raising Their Dividends

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Bank of Nova Scotia. The Motley Fool has a disclosure policy.

You can simplify the wealth-building process inside a Tax-Free Savings Account (TFSA) if you focus on businesses with stability, dependable earnings, strong competitive advantages, and long-term growth potential. One top Canadian stock that continues to check all those boxes is Toronto-Dominion Bank (TSX:TD).

In this article, I’ll explain why TD could be a great stock that TFSA investors can comfortably buy, hold, and never feel the need to revisit.

TD Bank stock

Simply put, TD Bank is one of North America’s largest financial institutions, serving more than 28 million clients across its Canadian personal and commercial banking, U.S. banking, wealth management and insurance, and wholesale banking operations.

That diversification is one of TD’s biggest strengths because it helps reduce reliance on any single market or business segment. The bank generates revenue from lending, deposits, insurance, capital markets, wealth management, and everyday retail banking services.

TD stock currently trades at $156.18 per share with a market cap of about $261 billion. Over the last year, the stock has surged 67%, reflecting improving investor confidence and strong operational performance. It also offers a dividend yield of 2.8% at this market price, with quarterly payouts.

Its latest earnings report highlights strength

In the second quarter of fiscal 2026 (ended in April), the bank posted net income of $4.3 billion, compared with $11.1 billion a year earlier. At first glance, that big decline may look concerning. However, it’s important to note that last year’s reported profit was boosted by large one-time items, including the gain from the sale of Schwab shares.

On an adjusted basis, which gives a clearer view of the bank’s underlying performance, TD’s net income rose 15% year over year (YoY) to $4.2 billion. Adding to the optimism, its adjusted earnings climbed 21% YoY to $2.38 per share. That is clearly a strong result, especially for a large bank operating in a slower economic environment.

Last quarter, TD’s Canadian personal and commercial banking business delivered record second-quarter revenue and earnings. Net income in this segment rose 15% YoY to $1.9 billion with the help of higher revenue and lower provisions for credit losses.

Similarly, the bank also delivered record earnings in wealth management and insurance, where net income rose 18% from a year ago to $837 million. The segment benefited from record assets, higher insurance earned premiums, and deposit volume growth.

A reliable dividend and long-term growth opportunities

For TFSA investors, dividend income can become especially powerful because those payouts can compound tax-free over time. TD has long been known as one of Canada’s most reliable dividend-paying stocks, and its latest report added another positive signal. Notably, the bank paid dividends of $1.08 per share in the April 2026 quarter, up from $1.05 per share in the April 2025 quarter.

Meanwhile, TD’s balance sheet also remains strong as it ended the latest quarter with a Common Equity Tier 1 (CET1) capital ratio of 14.3%. This ratio is important because it shows how much high-quality capital the bank has to absorb potential losses and support future growth.

In addition, the bank continues to invest in innovation, artificial intelligence (AI), and client experience. Its wealth management business recently launched a redesigned TD Easy Trade app, while TD Insurance introduced a client-facing generative AI-powered virtual assistant. These investments could help TD improve efficiency, strengthen customer relationships, and stay competitive as banking becomes more digital.

Foolish bottom line

TD’s latest earnings report, released on May 28, clearly shows a bank with improving operating momentum and strengthening fundamentals. Its adjusted earnings rose, several business segments delivered record results, capital levels remained strong, and the bank showed confidence through a dividend increase and ongoing buybacks.

For TFSA investors, that combination is really attractive. That’s why TD stock continues to look like one of the strongest choices on the TSX today.

The post The #1 TFSA Stock I’d Buy, Set Aside, and Never Feel the Need to Revisit appeared first on The Motley Fool Canada.

More reading

• Thinking About Bank Stocks? Here’s What to Know This August
• TD or BMO? Here’s the Dividend Stock I’d Rather Buy
• Is This Canada’s Best Dividend Stock for 2026?
• A High Yield Won’t Save You From a Dividend Cut: These 2 Payouts Look Safer
• Here’s How I’m Building My Own Pension With Canadian Dividend Stocks

Charles Schwab is an advertising partner of Motley Fool Money. Fool contributor Jitendra Parashar has positions in Toronto-Dominion Bank. The Motley Fool recommends Charles Schwab. The Motley Fool has a disclosure policy.

Shares of Toronto-Dominion Bank (TSX:TD) have delivered market-beating returns to long-term shareholders. Since April 1995, TD Bank stock has returned 1,820%. Moreover, if we adjust for dividend reinvestments, cumulative returns are closer to 5,480%. It means a $1,000 investment in TD stock three decades back would be worth close to $56,000 today.

Despite these outsized gains, the TSX stock is down 22% from all-time highs. So, let’s see if you should buy the TSX bank stock while it’s below $85.  

Is TD Bank stock a good buy in 2025?

TD Bank is making significant progress on its balance sheet repositioning and strategic review while navigating economic uncertainty caused by U.S. tariffs. The bank’s new chief executive officer (CEO), Raymond Chun, is leading a comprehensive strategic review process that is approximately two-thirds complete.

The review focuses on four key areas: capital allocation across business lines, simplifying the portfolio, investing in growth capabilities, and restructuring the bank’s cost base.

The recent sale of TD’s stake in Charles Schwab generated approximately $15 billion in capital, with $8 billion allocated to share buybacks and the remainder reserved for strategic initiatives. The Canadian bank has initiated its buyback program and expects to repurchase up to 100 million shares over the next 12 months.

While focusing on organic growth, TD has categorically ruled out near-term acquisitions, with Chun stating that mergers and acquisitions (M&A) would be too distracting. At the same time, the bank is prioritizing remediating anti-money laundering (AML) issues. TD has budgeted approximately $500 million annually for 2024 and 2025 for AML remediation, with expenses expected to normalize in 2027.

In its U.S. operations, TD is making substantial progress in repositioning its balance sheet. The bank has created approximately $40 billion in buffer space below its $434 billion asset cap and completed a bond repositioning program, which is expected to generate $300 million to $ 500 million in additional net interest income.

Chief Financial Officer Kelvin Tran acknowledged that newly imposed tariffs between the U.S. and Canada would create economic headwinds but expressed confidence in the bank’s ability to manage through this period. TD has observed customers taking a “wait-and-see approach,” with some pausing investment decisions amid the uncertainty.

What is the target price for TD Bank stock?

Despite a challenging environment, TD’s business momentum remains strong. The wholesale banking division achieved a record $2 billion in quarterly revenue in the fiscal first quarter (Q1) (ended in January), following the integration of Cowen. Meanwhile, the wealth management business posted record earnings, with a return on equity nearly double that of its closest competitor.

In Canadian personal and commercial banking, which generates approximately 70% of TD’s earnings, the bank continues to see growth opportunities through deepening relationships with its 14 million clients.

TD maintains a strong capital position with a CET1 (common equity tier-one) ratio target of approximately 13%. Executives hinted at potential additional share repurchases following the conclusion of the strategic review if excess capital remains available.

TD stock trades at a forward price-to-earnings multiple of 10.7, which is lower than its 11.1 times multiple over the past decade. Bay Street expects adjusted earnings per share to expand from $7.78 per share in fiscal 2025 to $9.43 per share in 2027.

Analysts remain bullish on TD stock and expect it to increase by 8.5% over the next 12 months, based on consensus price targets. If we include the dividend payout, total returns could be closer to 13%.

The post Should You Buy TD Bank Stock While it’s Below $85? appeared first on The Motley Fool Canada.

More reading

• Thinking About Bank Stocks? Here’s What to Know This August
• TD or BMO? Here’s the Dividend Stock I’d Rather Buy
• Is This Canada’s Best Dividend Stock for 2026?
• A High Yield Won’t Save You From a Dividend Cut: These 2 Payouts Look Safer
• Here’s How I’m Building My Own Pension With Canadian Dividend Stocks

Charles Schwab is an advertising partner of Motley Fool Money. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Charles Schwab. The Motley Fool has a disclosure policy.