What's next for TD Bank stock? Get key insights that'll help you better guide your clients and prospects through shifting markets and economic fluctuations
Whether you’re already working as a financial advisor or just starting out, keeping up with TD bank stock’s performance will you an advantage. The financial world doesn’t stand still—markets can swing, and interest rates can shift quickly. Your clients will rely on you to help them make sense of these changes and guide them toward making the right call.
Plus, by understanding how TD stock reacts to market conditions, you’ll be better prepared to answer questions and spot opportunities. In this article, Wealth Professional Canada will talk about TD bank stock. We will look at recent figures to help you decide whether you should advise your clients to make an investment. We’ll also cover some background on TD and how it compares to other major Canadian banks.
Indicators to look at in a bank stock
Is TD bank stock a good buy? A good way to know this is to look at the relevant indicators. Here’s what you should tell your clients to watch out for to know if a bank stock is a worthy investment:
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Market capitalization or market cap can be taken as a prime indicator of a company’s investment viability. More than simply the total value of a company’s total shares, this indicator can give a better picture of the company’s size compared to its industry rivals
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Price to book (P/B) value ratio is a ratio that compares the current market cap of a company to its accounting value. Investors should pick stocks with a low P/B ratio; this indicates that they can end up paying less for stocks with more book value
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Price to earnings (P/E) ratio is a key measure that shows if a stock’s price is high or low relative to its company’s earnings
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Dividend payout ratio (DPR) tells how much a company pays out to investors in dividends, in comparison to the earnings of the stock. The DPR is an important indicator of a company’s sustainability, since it shows how well a company’s earnings can cover dividend payouts
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Dividend yield indicates how much a company pays in dividends yearly, relative to its stock price
Other important bank stock indicators
When considering investing in stocks, it’s advisable to look at other indicators particular to their industries. As TD is a bank stock, another metric to look at is its loan-to-deposit ratio (LDR).
The loan-to-deposit ratio is used to assess a bank’s liquidity. The LDR is the bank’s total loans relative to its total deposits for a certain period and is expressed as a percentage value.
LDR = bank’s total loans ÷ total deposits
A very high loan-to-deposit ratio can mean:
- the bank lacks liquidity to take on any unexpected fund requirements
- the bank does not have enough money to cover bad loans and/or withdrawals
- the bank has low liquidity and could be vulnerable to a bank run
On the other hand, a very low LDR could mean that the bank is not earning as much as it should.
A good loan-to-deposit ratio should be in the range of 80 percent to 90 percent. An LDR of 100 percent means that every dollar deposited is also every dollar loaned out.
Introduction to Toronto-Dominion Bank
Toronto-Dominion Bank was established on February 1, 1955, via a merger of two other large banks, Toronto Bank and Dominion Bank. The two banks already had a long history, with the former being established in 1855 and the latter in 1869.
Here are some of the relevant rankings of TD Bank Group as of 2025:
- second largest bank in Canada by total assets and market capitalization
- 26th largest bank in the world by assets
Today, TD Bank and its subsidiaries have a staff of around 95,000 people serving over 27.9 million clients worldwide.
In Canada, TD Bank caters to over 15 million customers with its network of more than a thousand branches. It also serves over 10 million customers in the United States.
What is the 5-year return on TD stock?
As of 2025, the 5-year total return on Toronto-Dominion Bank (TD) stock is approximately 109.21 percent. This means an investment of $1,000 in TD stock five years ago would now be worth around $2,092, assuming dividends were reinvested. This performance includes both capital gains and dividends, making it a solid long-term holding.
Compared to its peers, TD has outperformed, with the average return in the financial sector being closer to 42 percent over the same period. This places TD among the top 15 percent of stocks in its category. Its performance reflects strong fundamentals, consistent dividend payouts, and resilience in volatile markets.
What is the future price of TD Bank stock?
Forecasts for TD Bank's future stock price vary widely depending on economic outlooks and analyst models. As of mid-2025, some analysts estimate a modest dip, reflecting caution amid interest rate uncertainty and market fluctuations.
Others are more bullish, projecting the stock could rise, citing good earning potential, a healthy dividend yield, and long-term growth prospects.
These differing forecasts reflect diverging views on Canada's economy, banking sector stability, and TD’s ability to maintain profitability. Investors should weigh these forecasts alongside their risk tolerance and investment horizon before deciding whether they should invest in TD bank stock.
If you have clients who want to, you can tell them that TD earned more profit than analysts expected during its second quarter results:
Check out this list of the best Canadian bank stocks to invest in now. And guess what? TD bank stock took the second spot!
TD stock indicators
TD stock is a common choice for investors looking for steady income and long-term growth. Let’s look at three indicators to determine whether TD stock is worth investors’ time and money:
- market cap
- P/E ratio
- P/B ratio
Let's discuss them at length below:
1. Market cap: $176 billion
As of 2025, TD has a market capitalization of $176 billion. Market capitalization, or market value, is a simple way to measure how big a public company is. It’s calculated by multiplying the company’s current stock price by the total number of shares it has.
This can provide your clients with a quick estimate of what the whole company is worth. Seeing that TD’s market value is more than $100 billion, your clients will obviously know that it’s among the biggest (the second one, in fact) and most established in the market.
2. P/B ratio: 1.41
TD has a price-to-book (P/B) ratio of 1.41. This suggests that investors are paying 1.41 times the company's net asset value. While this isn't considered particularly low, it reflects a reasonable valuation, especially when compared to higher P/B ratios in the industry.
A lower P/B ratio doesn't automatically mean a stock is undervalued. Your clients should also consider other factors like its dividend history and overall financial health.
For instance, TD has shown consistent dividend payouts and maintains a solid return on equity. These are positive signs if your clients want to invest in this bank stock.
3. P/E ratio: 11.5
TD has a price-to-earnings (P/E) ratio of around 11.5. This is lower than average for the broader market, which often ranges from 20 to 25. A lower P/E ratio can mean that the stock is undervalued, especially if the company is still making strong profits.
In the case of TD, the positive and relatively low P/E ratio might suggest that the bank is earning well compared to its share price. This makes it a potentially attractive option for value-focused investors.
On the other hand, a very high P/E ratio could mean a stock is overpriced based on future expectations. A negative or near-zero P/E usually means the company is not profitable and is reporting losses.
So, while TD’s P/E ratio alone doesn't guarantee a good investment, it does point to solid earnings at a reasonable valuation. This is especially true when combined with its dividend strength and financial stability.
Note: Numerical values were sourced from CompaniesMarketcap.
To learn about TD bank stock performance in 2025, watch this video:
How TD Bank compares to other Big Five Banks
The Big Five Banks in the country are:
- Royal Bank of Canada
- TD Bank
- Bank of Montréal
- Canadian Imperial Bank of Commerce
- Bank of Nova Scotia
Each of these banking giants has a strong presence in the financial sector. We'll highlight some of TD Bank’s features to help you make a comparison:
- Size and market value: As mentioned above, TD has a market capitalization of around $176 billion as of 2025. This makes it the second-largest bank in Canada after Royal Bank of Canada (RBC) in terms of market value. A large market cap signals a good investor base and financial influence.
- North American footprint: TD has an extensive US presence with more than a thousand branches in the United States, particularly in New York, Florida, and along the East Coast. This gives it a unique cross-border advantage compared to peers like CIBC and National Bank, which are more Canada-focused.
- Revenue and earnings: TD consistently reports high earnings, supported by retail banking, wealth management, and capital markets. In 2025, adjusted earnings per share were boosted by strong trading income and asset sales.
- Innovation and customer satisfaction: TD invests heavily in digital banking and mobile platforms. It is often rated highly for customer experience, on par with or ahead of most of its peers.
Why should your clients invest in TD bank stock?
In terms of overall performance, there’s no doubt that TD Bank has been outstanding, especially in its total returns. They’re up by more than 47 percent in July 2025. Currently, it holds the number two position among Canada’s largest banks.
If your clients already own TD shares, holding onto them could be wise, since the bank remains stable and continues to reward shareholders. Plus, TD’s consistent performance and history of dividend payments make it attractive for those planning for the future.
Ultimately, TD bank stock can be a solid option for investors looking for both long-term growth and reliable dividend income. It’s well-suited for people who want steady returns without taking on too much risk.
For more information on different types of bank stock, visit our investor resources section.
