4-Star Stocks Poised to Pop: TD Bank

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Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Canadian banking giant Toronto-Dominion Bank (NYSE: TD) has earned a respected four-star ranking.

With that in mind, let's take a closer look at TD Bank's business and see what CAPS investors are saying about the stock right now.

TD Bank facts

Headquarters (founded)

Toronto, Canada (1855)

Market Cap

$25.5 billion

Industry

Diversified Banks

TTM Revenue

$10.8 billion

Management

CEO Edmund Clark (since 2002)

CFO Colleen Johnston (since 2005)

Return on Equity (average, last three years)

15.1%

Dividend Yield

7.0%

Competitors

Royal Bank of Canada (NYSE: RY),

Scotiabank (NYSE: BNS),

Bank of Montreal (NYSE: BMO),

CIBC (NYSE: CM)

CAPS members bullish on TD also bullish on:

General Electric (NYSE: GE)

CAPS members bearish on TD also bearish on:

SunTrust Banks (NYSE: STI)

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 383 of the 405 members who have rated TD Bank -- or 95% -- believe the stock will outperform the S&P 500 going forward. These bulls include sahmednj and shaileshnita.

Last month, sahmednj listed several of the stock's strong points: "TD being a Canadian bank more regulated, low PE, increased ownership in [TD Ameritrade], owned [Commerce Bank] which was a huge success in North America. Will easily outperform S&P 500.”

In a pitch from January, shaileshnita also tapped TD Bank as a refreshingly safe way to get into banking:

It is a Canadian bank with a very attractive dividend. I know that their day-to-day banking business is very good as I am one of its customers. The banking sector in Canada has not been hammered as badly as in US primarily because they have been very conservative in their lending practices. The P/E is very attractive and I feel that the downside risk is very low.

What do you think about TD Bank, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Scotiabank is a Motley Fool Income Investor pick. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 11, 2009, at 12:34 PM, SteveTheInvestor wrote:

    It does seem true that Canadian banks have been more conservative than the greed-meisters in the US. However, I lost count as to how many times I have heard other banks described as being detached from the problems facing US banks, only to watch them self-destruct and become nationalization candidates.

    TD may indeed be a standout candidate, but I also don't think the full effect of a lousy economy has hit them yet. In my mind, TD stock is heavy on risk compared to more "normal" times. They haven't cut their dividend, yet, but they may. In that it would be the dividend that interests me, I'm hesitant to buy into TD.

  • Report this Comment On March 11, 2009, at 9:18 PM, tecsbrain wrote:

    The problem with TD is that it bought Commerce, which was NOT a Canadian bank and did carry some bad debt...how TD shakes that bad debt off is what will determine how the stock performs.

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