TD.TO
🇨🇦TSXCanadian BanksThe Toronto-Dominion Bank
Last reviewed: May 15, 2026Deep review
CA$112.92
-CA$0.4000 (-0.35%)
Mkt cap: C$264.66B
5-year price history
1D
1W
1M
6M
1Y
5Y
Bull case
- Q1 2026 adjusted EPS of C$2.44 beat the C$2.26 consensus by 8%, and the Schwab stake divestiture added ~150 bps to the CET1 ratio (now ~14.7%), funding a C$8B share buyback program that has helped TD recover over 70% from its 2024 lows.
- TD trades at a forward P/E of ~10.4x — a meaningful discount to RBC and BMO — providing a margin of safety and potential re-rating catalyst once the U.S. asset cap is lifted, currently expected no earlier than 2027.
- Quarterly dividend raised to C$1.08 per share (a 2.9% hike), offering a ~3.3% eligible dividend yield that compounds tax-free in a TFSA while investors wait for the regulatory overhang to clear.
Bear case
- The U.S. asset cap of US$434B imposed by regulators remains in place until at least 2027, structurally limiting TD's ability to grow its most important non-Canadian business line for an extended period.
- TD spent C$507M on AML remediation in fiscal 2025 and expects a similar spend in 2026, with the total tab from the US$3B criminal/regulatory settlement and ongoing compliance infrastructure weighing on returns.
- The U.S. Retail segment's profitability recovery is back-half-2026 loaded — any new regulatory findings or delayed asset-cap removal timeline could reset analyst expectations and keep the valuation discount entrenched.
Why a Canadian investor might own this
TD is a core Canadian bank holding with a unique US angle via its retail branch network and Schwab stake. The 2024 AML settlement is a near-term overhang but also why TD trades at a small discount to RY — that discount could compress as remediation progresses. Eligible dividends make it tax-efficient in both TFSA and non-registered accounts.
Account fit
| Account | Fit | Why |
|---|---|---|
| TFSA | Ideal | Eligible dividends, tax-free compounding. The AML discount makes the entry valuation attractive relative to RY. |
| RRSP | Good | Tax-deferred reinvestment of eligible dividends. Solid long-term holding. |
| FHSA | OK | Reasonable income stability for the FHSA horizon but slow capital appreciation. |
| Non-reg | Good | Eligible dividend tax credit applies. Better after-tax yield than it first appears. |
Ideal = best tax outcome · Avoid = material drag or ineligible · Color and symbol, not color alone, indicate fit.
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