Toronto-Dominion Bank (TD)

[Roadmap2Retire]

Toronto-Dominion Bank (TD) looks undervalued at current levels. My full dividend stock analysis is available here.

[earthtodan]

I started a position in TD as it dropped under 50, and I'll add if it keeps falling. Good to see your article, it gives me confidence that it's not overpriced even after this year's steady rally.

I also own BNS. The big question for me is, how do you choose a Canadian bank? My investing strategy is to narrow down my portfolio to be somewhat concentrated, but I don't have the time, or the background knowledge in finance and economics, to try to pick a winner among the big 6. The solution so far has been to buy these two, not pay attention, and hope I stumble on the answer later.

[DividendDragon]

Looks a decent buy. As I already own shares in the UK bank LLOY I'll give it a miss.

Good analysis though but I'm doubting it's ability to keep raising dividends near at an economic downturn as it froze them in 2008 if I understood correctly.

If it drops to around $40 I might consider it as a short term holding.

[Roadmap2Retire]

Thanks for the feedback on the analysis, earthtodan and Lewys.

I own BNS as well and its one of the best run banks imo. I dont have a huge position in BNS but I have a DRIP plan, so that should keep building over time.

TD is a bit of a riskier investment as they have leveraged up a lot more than the other banks. And I think that reflects in the prices. TD is a bit more underpriced than other banks like BNS, RY. Having said that, TD is not going to collapse like some of the other institutions last decade. The bank is still safe by most standards. TD has grown a lot in the last couple of years as well - they have expanded quite a bit in the credit market by buying companies like MBNA etc. and owns close to 20% of the market share. During the financial crisis, they took an initiative to expand and grow in the US and now TD has the biggest exposure to the US market than other Canadian banks (BNS and RY are more focused in Latin America).
TD's CEO Clark is retiring and the current COO is taking over as CEO starting Nov 1. Heres an article profiling the new CEO from The Globe And Mail.

The other big ones - BMO and CM are also quite stable. Cant go wrong with those investments either. NA (National Bank) wants to move up the tier to join the Big-Five, and is trying to grow outside Quebec - so its exposure is quite limited. For that reason, its considered more of a second tier regional bank and clubbed together with Laurentien Bank (also focused in Quebec), Canadian Western Bank (focused in Western Canada).

It really is a toss up and hard to pick. I am considering initiating a starter position in either TD or RY (will have to do a full analysis of RY - which I should be able to finish this weekend...so look forward to that early next week).

Fun fact: BMO is the oldest dividend payer in Canada (paid dividends since 1829) and the second oldest is BNS (paid dividends since 1832).

[saimash]

Whats up with al the Banks in Canada (TD, BOM, BNS, RY are all down considerably).... Anyone can explain the reason for this and if it is a good entry point now to get into RY

(10-15-2014, 10:46 AM)Roadmap2Retire Wrote: Thanks for the feedback on the analysis, earthtodan and Lewys.

I own BNS as well and its one of the best run banks imo. I dont have a huge position in BNS but I have a DRIP plan, so that should keep building over time.

TD is a bit of a riskier investment as they have leveraged up a lot more than the other banks. And I think that reflects in the prices. TD is a bit more underpriced than other banks like BNS, RY. Having said that, TD is not going to collapse like some of the other institutions last decade. The bank is still safe by most standards. TD has grown a lot in the last couple of years as well - they have expanded quite a bit in the credit market by buying companies like MBNA etc. and owns close to 20% of the market share. During the financial crisis, they took an initiative to expand and grow in the US and now TD has the biggest exposure to the US market than other Canadian banks (BNS and RY are more focused in Latin America).
TD's CEO Clark is retiring and the current COO is taking over as CEO starting Nov 1. Heres an article profiling the new CEO from The Globe And Mail.

The other big ones - BMO and CM are also quite stable. Cant go wrong with those investments either. NA (National Bank) wants to move up the tier to join the Big-Five, and is trying to grow outside Quebec - so its exposure is quite limited. For that reason, its considered more of a second tier regional bank and clubbed together with Laurentien Bank (also focused in Quebec), Canadian Western Bank (focused in Western Canada).

It really is a toss up and hard to pick. I am considering initiating a starter position in either TD or RY (will have to do a full analysis of RY - which I should be able to finish this weekend...so look forward to that early next week).

Fun fact: BMO is the oldest dividend payer in Canada (paid dividends since 1829) and the second oldest is BNS (paid dividends since 1832).

[Roadmap2Retire]

Heres my reasoning.

Its a combination of reasons - and the the result of broad market selloff. The Canadian market is technically in correction mode, having fallen more than 10% from the highs. Canada is a resource-rich economy and with the current pressure in oil and energy markets, Canada's economy is/will suffer. Moreover, the Canadian dollar has sort of become a petrodollar over the last few years and because of the fall in oil prices - has resulted in the fall of the Loonie (Canadian dollar). This will affect financial statements for all internationally exposed corporations in the coming quarters and that includes the banks.

Whats a good price to get in? I dont know. Where and when do you want to catch the falling knife? But the correction is good news for long term investors to lock in some decent yields.

[saimash]

Thanks for the thorough explanation R2R :-)

(10-15-2014, 12:30 PM)Roadmap2Retire Wrote: Heres my reasoning.

Its a combination of reasons - and the the result of broad market selloff. The Canadian market is technically in correction mode, having fallen more than 10% from the highs. Canada is a resource-rich economy and with the current pressure in oil and energy markets, Canada's economy is/will suffer. Moreover, the Canadian dollar has sort of become a petrodollar over the last few years and because of the fall in oil prices - has resulted in the fall of the Loonie (Canadian dollar). This will affect financial statements for all internationally exposed corporations in the coming quarters and that includes the banks.

Whats a good price to get in? I dont know. Where and when do you want to catch the falling knife? But the correction is good news for long term investors to lock in some decent yields.