Toronto-Dominion
Bank (TD, $67.07): “Dominating Toronto”
By: Matt Schembari, AIM Student at Marquette University
Summary
- Toronto Dominion Bank. (NYSE:TD)
provides financial products and services to customers located all over the
world. Most of the revenue comes from Canada and the United States, but other
revenue sources come from China, Japan, Germany, India, United Kingdom and
France.
- TD Bank strategy is to continue to prove its business model and have a forward focus on expanding.
- TD Bank has a plan to shape the future of banking by using digital adoption. They have had a forward focus thinking with digital users in Canada increasing by 8.0% YoY. In the United States they increased this number by 13.2% YoY.
- TD Bank has been able to increase its net income in the wholesale banking industry by 25% YoY while decreasing its expenses by 5%.
- TD Bank is on the higher side of its 52 week range, which ranged from 42.90-73.85. This is not shocking as last year TD Bank had to deal with COVID-19 and the effects of that..
Key points: TD
Bank Net Income is brought in by 4 different segments over the last year. TD
Bank brings in money from its Canadian Retail Bank (the most), the US Retail
Bank, Charles Schwab, and the wholesale banking segment. .
Canadian
Retail net income increased by 68% compared with the third quarter last year.
TD Bank was able to increase its revenue by 9%. They were able to increase the
revenue by increasing non-interest income by 13%. This increase was mainly from
a higher fee increase and higher insurance volumes. TD Bank also was able to
increase its loan by 7% and increase its deposits by 13% in the Canadian retail segment. .
Toronto
Dominion Bank in the US Retail segment grew its revenue for the quarter by 5%.
The Interest income decreased during this quarter, but once again the
non-interest income saw a strong growth. This 28% non-interest income
growth was primarily from fee income and
the increasing of customer activity. TD Bank was also to limit the increase in
expenses for increasing its deposits by 10% and an 18% on personal deposits..
TD
Bank also was able to increase the wholesale banking segment of the bank. The
wholesale banking net income increased by nearly 25%. This came from the
decrease in expenses. TD Bank has been trying to make its shareholders
constantly happy. TD Bank had consistent dividend growth. The Bank has been
able to increase its dividend yield over the last 25 years. Over the last 25
years the dividend growth grew about 11% annualized. .
What
has the stock done lately?
Over the last month TD Bank hasn’t seen
too much movement. TD Bank's value has increased by almost two percent. Most of
this increase has happened over the past week. Since September 24th the stock
has moved up 1.5%.
Past
Year Performance: TD
has increased 18.61% in value over the past year. The stock started off a year
ago at $56.25. This was the lowest the stock has been in the last year. At the
end of May it reached the stock high of the year of $73.33. The stock dropped
mid July and has been fluctuating since remaining around $67, its current
price.
TD Bank is at a good spot currently. The
bank had very strong numbers in quarter three. The focus on technology and
always trying to increase its mobile users will lead the bank to increase its customers.
The bank also reported strong numbers for non-interest income. The fees and
charges increase will bring another source of revenue besides interest income.
This will let TD Bank separate itself from other banks.
