If you’re bracing for a bear market, Toronto-Dominion Bank (TSX:TD) might be one of the smartest places to park your capital. Among Canada’s top banks, TD stands out for its mix of resilience, income, and value — especially in uncertain times. Here are three reasons why buying TD stock now could be a long-term win.
- Strong Diversification
TD is far more than a Canadian retail bank. Yes, domestic banking continues to perform well, with record revenue of $5.24 billion and net income of $1.95 billion last quarter. But the real story is in its diversified segments. Its wealth and insurance businesses saw net income surge 63%, while its wholesale division grew 26% year over year. This diverse revenue stream helps cushion the bank during economic downturns, offering fee-based and premium income even when lending slows.
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- Rock-Solid Capital Position
During bear markets, weak banks falter — but TD has one of the strongest balance sheets in North America. Its CET1 ratio of 14.8% gives it plenty of flexibility to absorb higher loan losses if needed. Despite consistent share buybacks and dividend hikes, TD maintains a healthy 3.9% dividend yield, with a conservative payout ratio of just 36%. That means a $7,000 investment today could earn you $285 annually, all while keeping your income safe and growing.
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- Undervalued and Profitable
Even with recent gains, TD trades at just 12.3 times earnings and 1.6 times book value, with an impressive 17.6% return on equity. That valuation provides a margin of safety — exactly what you want if markets turn south.
For long-term investors looking for reliable income and downside protection, TD stock remains one of the best buys on the TSX today.
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