From time to time, you discover a stock you could’t get enough of — a stock that, despite the fact that you’ve already bought a whole lot of it, makes you must proceed buying more. These stocks aren’t seen often, but once you find them, you have got a rare opportunity in front of you.
In this text, I’ll share one TSX stock that I keep buying hand over fist.
TD Bank
Toronto-Dominion Bank (TSX:TD) is a Canadian bank. It’s the second-biggest bank in Canada by market cap and the largest by total assets. TD has grown faster than other Canadian banks during the last decade due to its strong competitive position. It has a powerful brand, being consistently voted one in all Canadians’ favourite banks. It also scores well in on customer satisfaction in the USA. In its most up-to-date quarter, TD Bank achieved positive earnings growth — something that not all banks were capable of achieve in the identical period. It was a powerful showing for TD, which could keep delivering solid leads to the long run.
A moderate valuation
One big thing TD has going for it without delay, aside from the earnings beats, is a moderate valuation. It just isn’t low cost by banking standards, but it surely is cheaper than the markets as an entire, boasting ratios like
- 10.75 times earnings;
- 3.6 times sales;
- 1.63 times book value; and
- 4.41 times operating money flow.
Other than the price-to-sales ratio, these are all pretty low. Principally, once you buy TD Bank stock, you’re only paying for about 11 years’ price of earnings. This can be a higher deal than you’ll get with most stocks out there today. The incontrovertible fact that TD is growing (earnings increased about 5% last quarter) only adds to the thesis that it is comparatively low cost.
Two big deals coming up
One other exciting thing about TD Bank without delay is the incontrovertible fact that it has two big deals within the works.
The primary is the well-publicized deal to purchase First Horizon (NYSE:FHN). FHN is a U.S. retail bank within the southeast that does a few billion a yr in revenue. It’s situated in one in all the fastest-growing U.S. markets. The south typically is seeing more population growth than the north without delay, and that’s where TD desires to be. TD was criticized for offering a high price for FHN, but with FHN’s earnings growing, the worth doesn’t look as high because it initially did. Also, TD thinks it might help FHN save about $600 million a yr in costs after it closes the deal.
The second deal TD is working on is Cowen (NASDAQ:COWN). Cowen is a U.S. investment bank that does about US$128 million a yr in revenue. Investment banking isn’t really in an awesome place without delay. Banks generate profits taking corporations public via initial public offerings, and never that many corporations are selecting to go public on this turbulent stock market. It’s what it’s. On the intense side, TD is acquiring COWN at a much lower price-to-earnings ratio than FHN. Also, the deal doesn’t need as many regulatory approvals to shut in comparison with the FHN deal.
Overall, things are looking shiny for TD Bank. It’s profitable, it’s growing, and it’s not even that expensive. I’ll proceed to purchase this dividend stock for years.
The post I Keep Buying Shares of This Dividend Stock Hand Over Fist appeared first on The Motley Idiot Canada.
Should You Invest $1,000 In Cowen Inc.?
Before you think about Cowen Inc., you’ll need to hear this.
Our market-beating analyst team just revealed what they imagine are the 5 best stocks for investors to purchase in January 2023… and Cowen Inc. wasn’t on the list.
The net investing service they’ve run for nearly a decade, Motley Idiot Stock Advisor Canada, is thrashing the TSX by 16 percentage points. And without delay, they think there are 5 stocks which can be higher buys.
See the 5 Stocks
* Returns as of 1/9/23
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More reading
- Note to Your Future Self: These 3 TSX Stocks Could possibly be a Big Deal in 2030
- TD Stock: Is it a Good Investment Today?
- Why This TSX Stock Will All the time Do Higher Than a Growth Stock
- Here’s the Next TSX Stock I’m Going to Buy
- Here’s Why I’ll Keep Buying TD Bank Stock in 2023
Idiot contributor Andrew Button has positions in Toronto-Dominion Bank. The Motley Idiot has no position in any of the stocks mentioned. The Motley Idiot has a disclosure policy.