Monday, December 7, 2015

Recent Transfer: Toronto-Dominion Bank

The Toronto-Dominion Bank (NYSE:TD) is a Canadian chartered bank that provides a wide range of financial and banking services in North America and internationally. Services include checking and savings accounts, credit cards, mortgage and student loans, trusts, wills, estate planning, investment management services and financial and advisory services. In October 2015, TD had more than 24 million customers and assets totaling C$1.1 trillion. TD was founded in 1855 and is headquartered in Toronto.

TD is the 7th stock that I'm transferring from my portfolio at Scottrade to DivGro. So far, I've transferred Coca Cola (NYSE:KO), Proctor & Gamble (NYSE:PG), Kimberly-Clark (NYSE:KMB), AbbView (NYSE:ABBV), Dominion Resources (NYSE:D) and W.P. Carey (NYSE:WPC).

In the process, I've added $597.33 to DivGro's projected annual dividend income and $686.09 in past dividends to DivGro's total dividend tally.

Note that since TD is a Canadian company, 15% of dividend payments are withheld as foreign tax. Furthermore, although the dividend in Canadian dollars has increased every year since I bought my shares, the US dollar equivalent has not. This is due to the strength of the US dollar relative to the Canadian dollar.



In what follows, I exclude the 15% foreign tax deduction and show split-adjusted amounts. All amounts are in US$.

Transactions
2012-08-31 Bought: 42 shares of TD at $41.35 per share: $ 1,736.49
2012-11-01 Dividend on 42 shares at 32.7167¢ per share:  $ 13.74
2013-02-03 Dividend on 42 shares at 32.7833¢ per share:  $ 13.77
2013-05-01 Dividend on 42 shares at 34.1167¢ per share:  $ 14.33
2013-08-01 Dividend on 42 shares at 33.4200¢ per share:  $ 14.04
2013-11-01 Dividend on 42 shares at 34.5200¢ per share:  $ 14.50
2014-02-03 Dividend on 42 shares at 32.7857¢ per share:  $ 13.77
2014-05-01 Dividend on 42 shares at 36.4286¢ per share:  $ 15.30
2014-08-01 Dividend on 42 shares at 36.6905¢ per share:  $ 15.41
2014-11-01 Dividend on 42 shares at 35.3095¢ per share:  $ 14.83
2015-02-03 Dividend on 42 shares at 31.7619¢ per share:  $ 13.34
2015-05-01 Dividend on 42 shares at 35.7857¢ per share:  $ 15.03
2015-07-07Bought: 18 shares of TD at $41.83 per share: $ 752.92
2015-08-01 Dividend on 42 shares at 33.2619¢ per share:  $ 13.97
2015-11-01 Dividend on 60 shares at 33.0000¢ per share:  $ 19.80
                                                                
 Total Capital Invested $ 2,489.41

Total Dividends Received:$ 191.83

With this transfer, DivGro's projected annual dividend income increases by $79.20.

The following chart shows a 4-year history of TD's share price and indicates when I bought shares. Right now, I have an annualized gain of only 3%, as TD is trading at about the same price as my original buy.

Source: Scottrade

Why TD?


TD has a 6-year track record of annual dividend increases and a much longer track record of paying dividends. In fact, the company has paid a dividend every year since 1857. Here are some other reasons I like TD and why I decided to transfer the shares to DivGro:
  1. TD has a 12% annualized dividend growth per share going back to the early 1990's.
  2. The stock's effective yield is 3.22% (after deducting the 15% foreign withholding tax). 
  3. Dividend payout ratio is only about 45% of net income. 
  4. Morningstar estimates fair value at $50, implying a 20% upside from the current share price.
  5. TD is in the Financials sector – DivGro is still lightweight on Financials.
Do you own shares of TD? Do you think TD is a good dividend growth prospect? Please share your comments below.

2 comments :

  1. I love TD bank although I don't have it in my portfolio yet. I will consider when it is under temporary downward pressure. I have BNS, CWB, CIBC and BMO at this time.

    ReplyDelete
    Replies
    1. Hi BeSmartRich -- thanks for visiting and commenting. Those are solid stocks to own, thanks for sharing. TD is great for the reasons I mentioned, but also for the fact that it operates in the USA in addition to Canada.

      Take care!
      FerdiS

      Delete

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