TD deal a plus for investors

Article Excerpt

TD BANK, $75.67, is still a buy. Investors in the bank (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $137.2 billion; TSINetwork Rating: Above Average; Divd. yield: 3.9%; www.td.com) should now gain from the sale of its 43%-owned TD Ameritrade Holding Corp. (Nasdaq symbol AMTD). It’s one of the largest online brokerage firms in the U.S. TD Ameritrade has accepted an all-stock takeover offer from its chief competitor, Charles Schwab Corp. (New York symbol SCHW). The combined firm will become the largest discount broker in the U.S., with 24 million clients and more than $5 trillion in client assets. TD Bank will own 13.4% of the combined firm. Currently, TD Ameritrade deposits excess cash in its clients’ accounts with TD Bank. As part of the deal with Schwab, TD Bank will con-tinue to manage TD Ameritrade’s deposits until 2031, but will charge a lower fee. However, TD Bank expects the higher value of its investment to offset that hit. Its investors should also benefit from savings…