high dividend

TORONTO-DOMINION BANK $68 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 747.7 million; Market cap: $50.8 billion; SI Rating: Above average) earned $1.32 a share in its second fiscal quarter ended April 30, 2008, down 2.9% from $1.36 a year earlier. These figures exclude restructuring costs related to the bank’s recent purchase of U.S.-based Commerce Bancorp, Inc. and other one-time items. Loan loss provisions grew 35%. Revenue slipped to $3.4 billion from $3.5 billion. Lower fees and trading losses at its investment banking operations offset strong gains at its Canadian and U.S. retail banking operations. TD’s stock fell to $59 in March 2008 due to fears of subprime loan losses at its expanding U.S. operations. However, Commerce Bancorp has only nominal exposure to subprime loans. The stock now trades at 11.9 times its projected fiscal 2008 earnings of $5.73 a share. TD is one of our high dividend stocks, with the $2.36 dividend yielding 3.5%. TD Bank is a buy....

WASHINGTON MUTUAL INC. $20.51, New York symbol WM, fell $5 after it said its credit losses for 2007 would be roughly double its earlier prediction. An investigation into the mortgage industry by New York State’s Attorney General also weighed on the stock. The probe is looking for evidence that Washington Mutual pressured an insurance company to inflate home values in appraisals, making it possible for borrowers to obtain mortgages they couldn’t otherwise afford. When it appears a company has acted criminally, we always consider whether we should apply the cockroach theory – one criminal act, like one cockroach, may be a sign that the place is full of them. However, it’s far from clear that Washington Mutual acted unethically, much less criminally. Real estate appraisal involves a lot of judgment and appraisers tend to be conservative. Even if the allegations turn out to be true, they may only appear improper in hindsight, because home values later dropped....

WASHINGTON MUTUAL INC. $43 (New York symbol WM; WSSF Rating: Average) has a low p/e (10) and high dividend yield (4.7%), partly due to fears that it invested too heavily in the housing boom; this weighs on its stock price. Now, regulators want lenders to retain more of their earnings as a cushion against rising loan losses. That could hurt the company’s ability to raise its dividend. However, these rules would have a greater impact on smaller firms than larger banks like Washington Mutual. The stock is still a buy for growth and income. BORDERS GROUP INC. $25 (New York symbol BGP; WSSF Rating: Average) earned $1.87 a share in its fourth fiscal quarter ended January 28, 2006, up 12.0% from $1.67 a year earlier. These figures exclude unusual items. Sales crept up to $1.5 billion from $1.4 billion. Borders will likely lose between $0.20 and $0.30 a share in the first quarter of fiscal 2007, due to the costs of launching a new loyalty card program and ongoing improvements to its stores. But these moves should pay off in added sales....