Recent Buy – Toronto-Dominion Bank

TD Bank

Stop the presses! I made a purchase of a large cap dividend growth stock 🙂

jk…As most readers may be aware, I have been deploying a lot of my capital into precious metal equities (and the regular index fund purchases) lately. Heck, I’ve only had two or three transactions in the past six months where I have bought a dividend growth stock for my portfolio. This is because I see more value and opportunity in the precious metal sector and that has consumed my focus lately. However, about 1/3 of my portfolio is still invested in dividend growth stocks that brings in a sizable amount of passive income each month. This transaction is another move on that front as I saw a good opportunity to add to an existing holding.

Last week I added 25 shares of Toronto-Dominion Bank (TD.TO) @ C$66.95 adding $60 to my forward annual dividend income.

Recent Buy Decision

  • Last week, it was reported that TD employees had come forward saying that they were pressured to sell products/services to customers even though it was not in their best interest — all so that the goals/targets were met. As a result, the stock prices fell over 5% and I thought it was a good opportunity.
  • Since then, more employees from the other Big-Five banks have come forward with similar allegations against their respective employers. As a result, the Financial Consumer Agency of Canada will be launching an investigation/review.
  • Personally, I think it is naive to think that salesmen/companies don’t do this routinely. What’s the next big exposé? Car salesmen put their interest first and not the customers?
  • Toronto-Dominion Bank is one of the largest Canadian financial institutions and has been a beacon of stability and growth in the financial sector. The bank made a conscious decision to expand into the US market during the global financial crisis of 2008/09 and those moves have paid off very well over the past decade.
  • Instead of rehashing all the reason why its a great company to own, I will simply point to my recent Toronto-Dominion Bank Dividend Stock Analysis 2017 post which should paint the full picture.

Full Disclosure: Long TD. Our full list of holdings is available here.

25 thoughts on “Recent Buy – Toronto-Dominion Bank

  1. I do not live in Canada, but it looks to me that any of the these top 5 or 6 banks should be decent long-term investments, provided you get them at a nice price. It looks like they touch such a large portion of Canada’s economic activity, as if they have a “royalty” on the system.

    The funny thing is that the more I read about gold, the more I want to buy a few coins. Beh finance is a funny thing.

    • You are right, DGI. Any of the Big Five are great long term investments for the financial sector. I think most investors in Canada hold a significant amount of shares in their portfolios — whether directly or through the numerous ETFs/mutual funds or pensions.

      Best
      R2R

  2. Was your blog hacked??? A buy in a large bank??? This can’t be R2R can it? Love the buy. As you know I love the large Canadian banks with my TD, BNS and RY holdings. I haven’t added to them in a long time but they are a large portion of my ROTH account. Nice pick up.

    • Haha, no hacking here. I decided to put a little bit more money into the DGI pot. I wonder if there will be more blowblack from this scandal….if it falls more, I might add more shares, but the current level seems pretty decent. I know you are a big shareholder — hope those dividends are keeping you happy 🙂

      R2R

  3. Sounds like a pretty solid buy to me. With the recent price drop and dividend increase, a growing ~3.6% div yield is nice 🙂

    And I am hoping that the allegations are overblown throughout the big banks, as i too hold TD, BNS and RY. I would perhaps have added to my positions, but im already fairly heavy in financials.

    thanks for sharing.

    • Fair enough. I dont have an overexposure to financials — so thought it was a good time to add some shares. Even so, this was a small nibble at 25 shares. Will hopefully get even better prices to add more shares on this event

      R2R

  4. JC says:

    R2R,

    I saw the dip in TD’s share price and contemplated buying outright but went with an option play instead with a $50 strike put contract (US markets). I’ll probably regret that when it likely expires OTM, but I was able to collect a 2.5% “yield” from the option premium.

  5. I have been following for a short time and even then it seems odd that you have bought such a large bank! Well I guess everyone is different. Good on you though, this will add to your total income for many, many years. Well done.

  6. Great company, great buy, you can’t go wrong there!

    I do have a question. How do you look at the bank valuation wise compared to recent history? The 5% pullback is nice, but the stock went up more then 25% in the last months, so compared to half a year ago it’s still a big gap. Don’t you think the banks (they went up this much all 5) should come down more within the next year?

    • I would say, that the valuation is fair right now at P/E ~13 and Forward P/E ~11. In fact, the Canadian bank stocks are all pretty decently valued when you compare it to the broad market where consumer staples are trading P/E 20+ sometimes. What we had recently was probably an undervalued time when all the bank stocks were yielding 4%+.

      R2R

  7. Great buy, I was debating buying td because of this. But right now my financial sector is a little high so made a purchase elsewhere. To me its mind boggling how dumb people are. The banks are not your friend, I don’t see why people are so shocked. When I go to pull out cash 5k is the max i can pull out without 3 days notice. I will also get asked 20 questions…… Every time I go to the teller they are trying to sell me something that i don’t need. When we got a new house I was shocked at what we were approved for! They are a business and sales makes them money. Anyways great buy, I think td will do great for you!

    • I wrote about crap like this after the Wells Fargo scandal. Banks have to get their s*** together and stop pressuring/bullying their employees. Logical and ethical cross-selling ALWAYS beats out force-selling in the long term, mark my words.

      What kind of bank do you go to that required 3 days notice for a $5,000 withdrawal? Are you in Canada? Is this a Canadian thing? Because I have ten years in the American banking system and have NEVER heard of anything like that. Nor have I ever seen anyone interrogate a customer as to the purpose of the cash withdrawal. The only time American banks will really do anything is when we see that you are constantly trying to keep your cash withdrawals/deposits just below the $10,000 IRS reporting limit in order to avoid the report, and all we will do is send out a Suspicious Activity Report that you don’t know about anyway. Whatever happens next is not our problem.

      As for the tellers, they are required to make sales too. They don’t sell, they don’t work. As a former teller, I’ll tell you that it’s a really s****y job, but not as bad as other s****y jobs. They get pretty much nothing for their efforts; their minuscule bonuses are taxed at 50% and all they really get is the right to come back the next day and get yelled at by someone else.

      I’m really glad I’m not a teller anymore. As a licensed banker, I’ve traded the a**holes on the teller line for the a**holes on the platform. Now THESE morons will–

      Okay, I think my job is getting to me.

      Sincerely,
      ARB–Angry Retail Banker

  8. *Sees R2R buys dividend stock instead of precious metals. Buys rifle, canned vegetables, and survival property and hunkers down, waiting for the apocalypse to blow over*

    Sincerely,
    ARB–Angry Retail Banker

    • Hahaha….if I am the contrarian indicator, just wait until you hear from some of the other folks who cant fathom how much dividend investors have driven up the broad market in the chase for yield 🙂

      Will be interesting to see how stocks respond now that the interest rates are finally rising consistently. I figure we will get to a tipping point where the risk-reward balance shifts between bonds and stocks.

      R2R

  9. Yep, I did a double take as well. I rounded out my TD position last week at a slightly better price prior to the US$ weakening following the health bill failure.

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