Monday, January 12, 2015

Stock Purchase: TD



Today I initiated a position in Toronto-Dominion (TD).

  • TD:  110 shares @ 43.36 --- Yield  3.74% (initial position)

Total capital invested is $4779.60 and this will increase my yearly dividends by $178.20.

This investment is slightly off the beaten path for me as I really don't like the banking sector. While TD has fallen quite a bit over the past six months, its PE ratio is still around 12. Buying shares of bank with a PE over 10 is a bit dangerous in my opinion, however I tend to stay away from safe investments as is evidenced by my recent buying spree in the energy sector.

I really wanted to take a 3 month break from heavy investments, but I have found myself with my finger on the trigger over the past week. GE looks pretty good here in the $23 range. GE already is one of my largest positions so I opted to diversify with this block purchase.

Energy companies continue to dominate the headlines and I will certainly be adding to my positions tomorrow.

18 comments:

  1. The Canadian banks are well run and while I only own BNS for now, I would want to add TD and RY to my portfolio. Good buy here at these levels, MDP. Congrats on adding more dividends to your pipeline.

    R2R

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    1. R2R,

      Thanks. I really was torn between adding to GE or starting a position in UL or TD. Hopefully this proves to be a good investment. I am really glad to add to something other than energy right now.

      MDP

      Delete
  2. WFC probably would of been a better choice. Canada their housing bubble is massive and their consumer debt is extreme. Now that oil is crashing, they will have a lot of job loss.

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    1. Anonymous,

      I agree WFC is the safer choice, but it I think the Canadian banks have been beaten down quite a bit and thus offer a better value. I really don't like the banking sector as a general rule, however JPM and WFC certainly could be future additions for me.

      MDP

      Delete
  3. Nice purchase. I too dont like investing in the banking sector, but TD is a name I keep hearing about in the dividend investing community. I will probably put off buying a banking stock until i have a solid foundation of other stocks though.

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    1. DFD,

      I think you are making a wise decision. This is my first bank and I certainly would own PG, KO, MO, CLX, T and many other traditional dividend companies before dipping my toe in this sector. Good luck with your progress from here!.

      MDP

      Delete
  4. Nice buy! I don't know about the sector as a whole but I like the business as long as a bank is well run, diversified and has adequate capital. I think I would secretly like to be a banker. :) TD has long been and still is on my watch list but so far BNS is the only Canadian bank I own. I initially chose to go with BNS because I liked their operating income margin and return on equity better than TD's.

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    1. IFT,

      I would love to be a banker as well. I tried to join Lending Club a few weeks ago, but the program isn't available in Texas. I too was eyeing BNS, but ultimately chose TD.

      MDP

      Delete
  5. What I like about TD is their US exposure. Royal Bank and BMO also have US exposure, but I belive TD's exposure is the greatest - and that is why I bought TD shares last week.

    I'm Canadian and agree with Anonymous above. We have a housing bubble, we have too much consumer debt and the drop in oil prices will have an impact on jobs (mostly in western Canada). But keep in mind that most mortgages are insured by the federal government and unlike some states in the US, no one can walk away from a mortgage here.

    With my recent purchase of TD shares, I'm betting that when the real estate bubble pops, bank profits won't drop that much. And TD's US exposure will help stabilize earnings.

    ReplyDelete
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    1. ADY,

      I hope you are correct. The US housing crises that blew up back in 2007-2009 is the main reason I stay away from banks. I am counting on the Canadian banks to have learned from the problems that arose in the US. Time will tell.

      MDP

      Delete
  6. Great buy. TD is a solid company to be part of.

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    1. Tawcan,

      That is reassuring to hear. I think TD is getting hit a bit hard because of the recent collapse in energy. Hopefully things stabilize soon.

      MDP

      Delete
  7. MDP,

    I like the buy as an initial position given the slide and proximity to its 52-week low. I've been watching TD (and BNS) fall from their highs as well and currently don't have a TD position. I do have an initial position in BNS from 2014 and am about 3% down after the current slide. Not sure I'm ready to take the leap into more financials just yet, but I'm definitely watching closely and TD is a card on the table along with more BNS and a first position in WFC.

    Best,

    DWC

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    1. DWC,

      I agree with you about financials. I don't see myself buying anything else in this sector for a while. If a company like JPM falls back into the 40s I might look at picking up some shares.

      MDP

      Delete
  8. MDP,

    MONSTER purchase, holy crap thats a lot in one swing! How crazy is it, that all at once - you just added $178 going forward - great purchase, huge/strong bank and continue to average down when you can/when you are fulfilled with your position. It's been a fun week watching this market, that's for sure.

    -Lanny

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    1. Lanny,

      I think crazy is the right word. This is crazy time for the markets right now. There is insane turmoil in energy. Banks like TD are feeling the ripple effects and GE continues to hover around 52 week lows. Many opportunities in different sectors. I have a feeling my portfolio could be in for a rough 2015, but eventually things will settle and life will continue.

      Buckle up.

      MDP

      Delete
  9. TD is one of my favorite for a long time! Have you heard about the All Banks Portfolio strategy published in the G&M? Hope not too many investors will fall into that crazy idea!! Still a good buy on its own though ;-)

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    1. DivGuy,

      I haven't heard about the All Banks Portfolio strategy, but it sounds like a ulcer waiting to happen. :-) If TD drops down into the mid 30s I will probably pick up some more shares.

      MDP

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