Four Reasons to Invest in TD Bank

| About: Toronto-Dominion Bank (TD)
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On Wednesday I initiated a full position in Toronto-Dominion Bank (NYSE:TD). TD will now make up about 10% of my non-registered portfolio. Since TD is such a widely held stock in a widely followed industry in Canada, instead of a detailed post describing my thoughts on TD, and rationale behind the purchase, and valuation, I thought I would briefly list the most important factors that went into this decision.

My decision to invest in TD for the long-term right now was based on the following considerations:

  • It is the industry leading retail bank in Canada, operating within an oligopoly. I am attracted to retail banking as it tends to lend itself more towards consistency, loyalty, brands, and repeatable revenue and earnings.
  • The credit crisis has improved the valuation of all banks. To a certain degree the babies were thrown out with the bathwater, TD has little exposure and is 15% off it's 52 week high.
  • The above point is true to a large extent with U.S. banks. I'd like to entrust TD to acquire for me skillfully, and take advantage of good value in U.S. institutions.
  • TD has a great history of earnings and dividend growth, and currently sports a dividend pay out ratio of only 38%, and a solid yield of 3.7%.
  • As always, opinions and comments are appreciated.