toronto-dominion bank

TD BANK $54.90 (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $100.5 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.td.com) is Canada’s largest bank, with $1.03 trillion of assets. It also operates more branches in the U.S. than Canada (1,302 vs. 1,165) and owns 40.72% of TD Ameritrade (New York symbol AMTD), a leading online brokerage. Excluding one-time items, TD’s earnings per share rose 4.6% in its fiscal second quarter ended April 30, 2015, to $1.14 from $1.09 a year earlier. Revenue gained 4.4%, to $7.8 billion from $7.4 billion, as low interest rates continue to spur loan demand. The bank’s loan-loss provisions fell 4.3%, to $375 million from $392 million, because more U.S. credit card customers are repaying their loans on time....

AIMIA INC. $14.01 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-897-6800; www.aimia.com; Shares outstanding: 164.7 million; Market cap: $2.3 billion; Dividend yield: 5.4%) owns and operates Aeroplan, Canada’s largest loyalty program.

The company reports that its revenue rose 8.4% in the three months ended March 31, 2015, to $660.1 million from $608.9 million a year earlier.

Earnings fell to $30.7 million, or $0.15 a share, from $88.2 million, or $0.48. However, the year-ago quarter included a one-time payment of $73.4 million after TD Bank replaced CIBC as Aeroplan’s main credit card issuer on January 1, 2014.

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Canadian Banc Corp. is a split-share company with two types of stock: capital shares ($12.85, symbol BK on Toronto) and preferred shares ($10.26, symbol BK.PR.A on Toronto). The company holds shares of the six biggest Canadian banks. Split-share companies typically issue two classes of stock. Usually the capital shares get all or most of the capital gains and losses, as well as variable dividend income, and the preferred shares get a fixed amount of dividend income....

CAE INC., $14.85, Toronto symbol CAE, earned $64.1 million, or $0.24 a share, in its fiscal 2015 fourth quarter, which ended March 31, 2015. That’s up 6.8% from $60.0 million, or $0.23, a year earlier. The latest earnings matched the consensus forecast. Revenue rose 9.7%, to a record $631.6 million from $575.7 million, beating the consensus estimate of $627.2 million. CAE gets 58% of its revenue by selling flight simulators and pilot-training services to airlines, and this business’s revenue rose 13.6% during the quarter. CAE sold 10 simulators during the period, bringing the full-year total to 41; it sold a record 48 simulators in fiscal 2014....

AIMIA INC, $14.19, symbol AIM on Toronto, owns and operates Aeroplan, Canada’s largest loyalty program, with over 4.8 million members who collect Aeroplan miles from participating companies. Members can exchange miles for flights, car rentals, hotel rooms and merchandise. The company also owns Nectar, the U.K.’s biggest loyalty program. In addition, it has interests in Air Miles Middle East and Nectar Italia, as well as Club Premier, Mexico’s leading loyalty program. On January 1, 2014, TD Bank replaced CIBC as Aeroplan’s main credit card issuer. Under a 10-year deal, TD is now launching new cards under the Aeroplan banner, including cards for frequent flyers and small businesses. The agreement also let CIBC hang on to Aeroplan accounts held by customers who also bank at CIBC, which was about half of the Aeroplan portfolio....

Meta Description: Exchange-traded funds (ETFs) give investors a low-fee way to match market indexes, and these two ETFs are the cream of the Canadian crop.

ISHARES MSCI CANADA INDEX FUND $27.18 (New York symbol EWC; buy or sell through brokers; ca.ishares.com) holds the stocks in the Morgan Stanley Capital International Canada Index. The fund has a 0.49% MER.

The index’s top holdings are Royal Bank, 7.0%; TD Bank, 8.3%; Valeant Pharmaceuticals, 5.2%; Bank of Nova Scotia, 4.9%; CN Railway, 4.4%; Suncor Energy, 3.3%; Enbridge, 3.3%; Bank of Montreal, 3.1%; and Manulife Financial, 2.7%.

If you want to own a Canadian index fund, you should buy the iShares S&P/TSX 60 Index Fund (see previous page). You’ll pay about a third of the management fees.

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ISHARES CANADIAN SELECT DIVIDEND INDEX ETF $23.80 (Toronto symbol XDV; buy or sell through brokers; ca.ishares.com) holds 30 of the highestyielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of the ETF’s assets. The fund’s MER is 0.55%, and it yields 4.2%.

The fund’s top holdings are CIBC, 8.4%; Bank of Montreal, 6.3%; Royal Bank, 6.1%; Bank of Nova Scotia, 5.3%; BCE, 5.1%; IGM Financial, 4.7%; Ag Growth International, 4.4%; Laurentian Bank of Canada, 4.3%; TransCanada Corp., 4.2%; and TD Bank, 4.0%.

The ETF holds 53.5% of its assets in financial stocks. The top Canadian finance stocks have sound prospects. However, if you invest in this ETF, be sure to adjust the rest of your portfolio so it won’t be overly concentrated in the financial sector.

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ISHARES S&P/TSX 60 INDEX ETF $21.90 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.

The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include.

The index’s top holdings are Royal Bank, 7.8%; TD Bank, 7.1%; Valeant Pharmaceuticals, 5.6%; Bank of Nova Scotia, 5.4%; CN Railway, 4.8%; Suncor Energy, 3.6%; Enbridge, 3.6%; Bank of Montreal, 3.5%; BCE, 3.2%; Manulife Financial, 3.1%; Canadian Natural Resources, 2.9%; Trans- Canada Corp., 2.8%; Brookfield Asset Management, 2.7%; CIBC, 2.6%; and CP Rail, 2.5%.

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Exchange traded funds (ETFs) are set up to mirror the performance of a stock market index or sub-index. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index. ETFs trade on stock exchanges, just like stocks. That’s different from mutual funds, which you can only buy at the end of the day at a price that reflects the fund’s value at the close of trading. Prices of ETFs are quoted in newspaper stock tables and online. You pay brokerage commissions to buy and sell them, but their low management fees give them a cost advantage over most mutual funds....