TD remains a solid pick in turbulent times

Article Excerpt

The economic uncertainty caused by COVID-19 has forced TD, and other big banks, to increase the funds it sets aside for possible loan defaults. While that has hurt its current earnings, the bank can comfortably absorb these charges. As well, regulators have relaxed their capitalization requirements for banks, which should help TD cope during the crisis. To further preserve capital, all banks have suspended their share buyback programs and will hold their dividends steady. TORONTO-DOMINION BANK $63 is a buy. The bank (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares o/s: 1.8 billion; Market cap: $115.2 billion; P/S ratio: 3.2; Dividend yield: 5.0%; TSINetwork Rating: Above Average; is Canada’s second-largest bank (by market cap) after Royal Bank. TD gets 68% of its earnings from its Canadian retail business, which operates 1,087 branches. Its U.S. operations, which mainly consist of 1,220 branches from Maine to Florida, supplies 20% of its earnings. The remaining 12% comes from wholesale banking; it offers securities trading…

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