Stock (Symbol) |
TD Bank (TD) |
Stock Price |
$44 |
Sector |
| Financial |
Data is as of |
| October 16, 2016 |
Expected to Report |
| Dec 1 |
Company Description |
 TD operates as a bank in North America. TD conducts its business through segments, such as Canadian Retail, U.S. Retail, Wholesale Banking and Corporate. Canadian Retail provides a range of financial products and services to customers in the Canadian personal and commercial banking businesses, including credit cards, auto finance, wealth and insurance businesses. U.S. Retail consists of the Bank’s retail and commercial banking operations operating under the brand TD Bank, America’s Most Convenient Bank, and wealth management services in the United States. Wholesale Banking provides a range of capital markets, investment banking, and corporate banking products and services, including underwriting and distribution of new debt and equity issues, providing advice on strategic acquisitions and divestitures, and meeting the daily trading, funding and investment needs of its clients. TD is also an online financial services firm. Source: Thomson Financial |
Sharek’s Take |
 In a very simplistic explanation of a complicated transaction, Toronto-Dominion (TD) will acquire Scottrade Bank, and in the end TD Ameritrade (AMTD) will get Scottrade’s brokerage business. The deal was announced this morning before the open, and at the end of trading today TD stock still sits at $44 which is pretty much what it has been for the last six months. Toronto-Dominion, better known as TD Bank, is Canada’s 2nd largest bank with a concentration in Southern Canada and the eastern US. Low interest rates and sluggish Canadian GDP growth (caused in part by lower oil prices) has made it tough on TD to grow profits. Canada is an exporter of oil, and low oil prices made it hard on producing provinces Alberta, Saskatchewan, Newfoundland and Labrador. The cut in income was to the equivalent of $1500 per year for each Canadian citizen. But with a P/E of 12 any interest rate increases could help the stock in a big way. But I’ve been waiting for that to happen a year now and the stock’s not moving! Overall TD has an Estimated Long Term Growth Rate of 7% in addition to a nice 4% yield. That’t not a lot of profit growth but with the dividend that could result in a double-digit total return hypothetically. Really, what I’m here for this the upside. IF TD makes the $3.88 as expected in 2017 and gets its 14 P/E back the stock will be $54 which equates to 22% upside in addition to the fat dividend while you wait. Patiently. |
One Year Chart |
 Profits rose 7% last qtr on 9% sales growth. Profit estimates — both qtrly and annual numbers — stayed around where they were last qtr. At least the company beat the street by a little which gives us a little excitement here. Because we sure aren’t getting any with the stock. Qtrly profit Estimates for the next 4 qtrs are: 15%, 9%, 0% and 3%. That’s boring. |
Fair Value |
 I’m growing impatient with this stock I want to say goodbye. But watch, if I do the stock will shoot higher. |
Bottom Line |
 TD Bank gives investors a conservative bank stock with a fat yield a double-digit estimated total annual return. TD is also the quite stable stock — which is boring the heck out of me. Who knows if this merger with Scottrade will help the stock any — it sure didn’t today. But the good thing is TD is a deep value and if you invest you earn 4% while you wait. TD ranks 28th of 34 stocks in the Conservative Growth Power Rankings. Disclosure: Scottrade is a brokerage firm used by Shareks, LLC to hold client assets and make trades. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 28 of 34 |
