Toronto Dominion Bank or TD Bank is the fifth largest bank in North America by total assets. The bank offers a comprehensive range of financial products and services to 26.5 million customers worldwide.

It operates in three business areas:

  • Canadian retail accounts for 58% of revenue (TD Canada Trust, Business Banking, TD Auto Finance, TD Wealth, TD Direct Investing, and TD Insurance),
  • US Retail (28% – TD Bank, TD Auto Finance, TD Wealth and Investments in TD Ameritrade) and
  • Wholesale business (14% – TD Securities).

TD Bank has a large presence with more than 2,300 retail branches and over 6,200 ATMs in North America and 15 TD Securities offices worldwide.

The bank operates in four of the top 10 metropolitan areas and 70% of its business is in the wealthiest states in the United States. It is one of the tenth largest banks in the United States.

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Plant data

Sales growth & market presence

TD Bank has the number 1 or 2 market share for most retail products in Canada and has a total market share of 21%. It enjoys the status of two top investment dealers in Canada and continues to build an integrated North American dealer franchise with global reach.

Strategic offices in Canada and the US position the bank to better serve its customers. TD Bank has access to nearly 110 million people in the US within its presence. Over the years, the bank has increased its focus on retail customers, driven by lower-risk businesses with stable, consistent returns. Retail profits now account for 86% of the total income mix.

Over the years TD Bank has completely transformed from a traditional to a customer-focused North American trader. TD Bank offers a wide range of financial products and services, from retail banking to business and commercial banking to credit cards, assets and insurance in the retail segment. In the wholesale banking segment, the bank offers research, investment banking, capital market services and global transaction banking.

TD Ameritrade is a leading US brokerage company with assets of more than $ 1 trillion. In addition, the bank is expanding its product competencies with the introduction of new ETFs for wealthy and institutional clients as well as through new capabilities and partnerships. In 2021, she acquired Wells Fargo’s Canadian Direct Equipment Finance business. In addition to banking products, the bank offers tailor-made private banking and wealth management services through TD Wealth and vehicle financing and dealer services through TD Auto Finance.

TD Bank is a 165-year-old growth company and, with 15.1 million active digital customers and 10.2 million mobile users, is one of the leading online financial service providers worldwide. The bank implemented some restructuring charges over the past year to modernize its operations and improve its efficiency.

TD Bank launched the first digital capabilities with the introduction of TD GoalAssist and TD Global Transfer and invested in new digital capabilities, including TD Auto Finance’s self-service portal and end-to-end digital transformation of unsecured lending.

Although the bank saw volume growth and increased customer activity, its revenues declined 3% in the most recent quarter. The company recorded provisions for loan loss provisions in both Canadian and US retail stores and ended the quarter with a CET1 capital ratio of 14.2%.

You are free to hold TD on either stock exchange (TSX or NYSE) as it is a double-listed company. It really depends on where your money is and what currency you want to receive your dividends in.

Dividends

TD Bank is a Canadian dividend aristocrat who has been raising its dividend for more than a decade. It has a 164 year history of dividends. The current dividend yield is 3.6% with a reasonable payout ratio of 40%.

TD Bank has a target payout ratio of 40% -50%. The bank last increased its dividend by 6.7% in February of last year and increased its dividend growth by more than 9% over the past decade.

The bank has a history of proven performance that has provided industry-leading long-term shareholder returns. It has achieved over 9% CAGR in profits over the past decade. However, the results in 2020 were significantly impacted by the COVID-19 pandemic. However, it is gradually recovering.

TD Bank had assets valued at $ 548 billion, or $ 452 billion under management and administration. TD Bank expects profit growth of 7-10% in the medium term. The transaction between TD Ameritrade and Charles Schwab also made TD the largest shareholder in a highly regarded US investment firm.

Heavy investments in digital initiatives, solid customer focus and a large presence have helped TD Bank achieve consistently solid results. The bank is excellently positioned to drive significant volume growth in retail banking in the context of the economic recovery. TD bank also has good chances of benefiting from organic growth opportunities in important customer segments.

It occupies a leading market share in NYC and aims for the top 5 positions in all major US markets. A diversified, retail-focused business model and reach in North America are strong prerequisites for the bank. TD is expanding its US wholesale business with a presence in New York and Houston.

TD historical return
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competition

The bank competes with other leading Canadian banks such as the Royal Bank, the Bank of Montreal, Scotiabank, the Canadian Imperial Bank of Commerce, and the National Bank.

National Bank is one of the six largest commercial banks in Canada, while CIBC serves 11 million retail, small business, commercial, corporate and institutional customers in Canada, the US and worldwide.

Scotiabank is a leading international financial services company with a rich history spanning 185 years, while Bank of Montreal is the eighth largest bank in North America by assets and Royal Bank is one of Canada’s largest banks.

Bottom line

For Canadian investors, TD can be a core position and one of the few stocks with stock appreciation, dividend growth, and a good dividend yield. The bank’s performance will improve due to the improving economic outlook.

It is a good long-term investment with strong prospects for growth. TD Bank further expanded its market-leading position in important product lines, expanded its product capacities as well as digital and sales transformations. The bank is in a good position to leverage their industry leading design center to create a complete customer experience.

TD Bank expects future growth to result from an increased focus on retail and expansion in the US.

TD historical pe
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