Stock (Symbol) |
TD Bank (TD) |
Stock Price |
$50 |
Sector |
| Financial |
Data is as of |
| July 11, 2017 |
Expected to Report |
| Aug 25 |
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. 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. TD is also an online financial services firm. Source: Thomson Financial |
Sharek’s Take |
 Toronto-Dominion, better known as TD Bank (TD), is Canada’s 2nd largest bank with a concentration in Southern Canada and the eastern US. The Canadian division delivers double the profits than the American one, but America has better growth. During fiscal 2016, Canadian profits rose 1% on 5% loan growth and a 10% increase in deposits. US retail bank profits rose 9% last year on 11% loan growth and 9% deposit growth, and was helped by the addition of the Nordstrom card assets. TD Bank is big on FinTech, with the highest number of mobile banking visitors according to Comscore. In 2016 it introduced a new electronic F/X trading platform as well as a paperless claims process in its insurance business. Management believed it could deliver profit growth of 7% to 10% this year if U.S. conditions were sustained, and this qtr analysts bumped their 2017 profit growth projection from 6% to 12%. Long-term, analysts see this as a 10% grower (Est. LTG) and when you tack on a yield of 4% that would be an excellent return for a safe stock. But I think TD will grow profits around 6% a year, which is also what profits grew the past decade. Overall this is a boring stock that you really have to sit on. Profits have grown 16%, 11% and 12% the past three qtrs and with projections of 7%, 12% and 10% the next 3 qtrs the stock should be timely — but it still lacks luster. Still, the P/E of 12 is below the normal P/E of 14 so this stock has good upside to its Fair Value. |
One Year Chart |
 Sales increased a modest 3% last qtr as profits rose 12% and beat estimates of -1%. Profits have been growing good, but this stock just doesn’t get any momentum. After TD reported, 2017 estimates jumped from $3.92 to $4.16 — good. Maybe that’ll get the stock going. Analysts have qtrly Estimates of 7%, 12%, 10% and 3% and these numbers look a lot better than they did last qtr.The Est. LTG just increased from 9% to 10% and the P/E of 12 is good. |
Fair Value |
 For much of the past decade this stock had a P/E of 14, and with profits growing in the double-digits that seems to be a fair valuation. Thus I feel this stock is undervalued by a good margin. |
Bottom Line |
 TD Bank is a safe steady stock with a nice 4% yield. The problem is the stock’s only grown 5% a year the past decade. That’s weak. Perhaps with rates higher now the bank can grow profits faster, but I feel it is what it is. Still, TD ranks pretty high in the Power Rankings as profits are growing in the double-digits and the P/E is just 12. TD ranks 17th of 31 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 17 of 31 |
