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Topic: Blue Chip Stocks

TD BANK $57.36

TD BANK $57.36 (Toronto symbol TD; Shares outstanding: 1.9 billion; Market cap: $105.9 billion; TSINetwork Rating: Above Average; Dividend yield: 3.8%; www.td.com) is Canada’s largest bank, with $1.1 trillion in assets. It operates 1,265 branches in the U.S.—compared to 1,152 in Canada—and owns 41.01% of TD Ameritrade (New York symbol AMTD), a leading online brokerage.

TD’s revenue stood at $8.3 billion for the second quarter ended April 30, 2016. That’s a 6.4% increase from the $7.8 billion a year earlier. Earnings per share rose 5.3%, to $1.20 from $1.14.

Earnings from U.S. banking (30% of the total) jumped 21.0% thanks to the higher U.S. dollar and stronger loan demand. Partly offsetting that was the $584 million TD set aside to cover any future loan losses. It was up 55.7% from $375 million a year ago.

Low oil and gas prices could hurt the ability of energy producers to repay their loans. However, those borrowers now represent less than 1% of TD’s overall loan portfolio.

The stock trades at 11.7 times the bank’s forecast earnings of $4.90 a share for fiscal 2016. It yields 3.8%

TD Bank is a buy.

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