TORONTO-DOMINION BANK $67 - Toronto symbol TD

TORONTO-DOMINION BANK $67 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 854 million; Market cap: $57.2 billion; Price-to-sales ratio: 2.2; SI Rating: Above Average) is the second-largest Canadian bank, with total assets of $544.6 billion. TD has built up its U.S. retail-banking operations in the past few years, mostly through acquisitions. In May 2008, it paid $8.5 billion for Commerce Bancorp Inc. Commerce now operates as “TD Bank,” and has over 1,000 branches from Maine to Florida. TD’s U.S. operations now account for about 20% of its profits. But even with Commerce, earnings at TD’s U.S. operations fell 11% in the bank’s most recent quarter, which ended July 31, 2009. This was mainly because the division’s loan-loss provisions climbed 141% from a year ago. The jump was largely the result of depressed real-estate prices in some markets. It added to a 93.4% rise in TD’s overall loan-loss provisions, to $557 million from $288 million. Still, TD’s earnings rose 16.9%, to $1.3 billion from $1.1 billion. Earnings per share rose 8.9%, to $1.47 from $1.35, on more outstanding shares. These figures do not include the cost of integrating Commerce and writedowns of securities. Like Royal Bank, gains at TD’s securities-trading business were the main reason behind the higher earnings. Revenue rose 15.6%, to $4.7 billion from $4 billion. The stock trades at 13.2 times the $5.06 a share that TD should earn in 2009. The $2.44 dividend yields 3.6%. TD Bank is a buy.