Shareholders of TD Bank (TSX:TD) are probably breathing a huge sigh of relief as the new year comes to be, with a new chief executive officer (CEO) and the foundation to orchestrate some sort of comeback in a bid to catch up with other Big Six bank stocks, many of which have enjoyed a solid recovery year. In any case, it’s hard to imagine that things could get any worse for the fallen bank as it grapples with the aftermath of the past money-laundering fiasco.
Though TD Bank may still need to deal with regulatory question markets in the new year, I still think TD Bank’s incoming CEO, who will head into the corner in the first half of 2025, will have plenty of ideas to help make TD Bank a premier name again. Who knows? If TD’s new top boss can pull off a comeback, perhaps we’ll have a CEO of the Year candidate on our hands!
Undoubtedly, TD Bank remains one of the best-capitalized banks out there. And as it re-focuses its efforts on domestic (and perhaps international) growth in the new year, I view shares as a great comeback play for deep-value investors who don’t mind a bit of volatility to kick off 2025.
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TD Bank: It’s deeply discounted and likely not for long!
As always, it’s difficult to predict the future, especially for a firm that’s been the subject of numerous negative headlines. In any case, I am encouraged that many big names on Bay and Wall Street have recommended the name as a relative value play in the Canadian financial scene. In prior pieces, I’ve urged investors not to ignore such upgrades, which may continue flowing in as we enter the first quarter of 2025.
Apart from the relatively modest valuation multiples and the more than 5% dividend yield, I’m a huge fan of the new leadership team that’s coming in.
Indeed, the passing of the baton may not yield a colossal comeback overnight. However, over the next two to three years, I view TD Bank as more than well-positioned to win back Canadians’ trust and investment dollars. If TD can’t expand aggressively into the States for a while, perhaps the greater focus on Canada and a move internationally could make sense to jolt that growth profile.
Who knows? Perhaps hitting the brakes a bit on U.S. growth could be an opportunity to expand elsewhere.
Either way, I think TD stock is tough to ignore at these depths. It’s historically discounted relative to the peer group, with more in the way of positive catalysts in the new year. While most others are focused on the negatives of the past, I think it’s time to look forward to the future and the turnaround trajectory.
TD Bank’s too cheap to ignore for 2025
TD Bank has an opportunity to make right on its past mistakes. And while it could take several quarters for investors to flock back into the name, I find shares to be cheap enough to weather the next market-wide correction.
TD Bank remains a premier name and one that will rise again, perhaps as soon as a few months, should Canada’s banking climate continue to improve. So, is it time to back up the truck? If you can appreciate a cheap, swollen, and safe dividend, I think it is.
