The S&P/TSX Composite Index dropped 299 points on Friday, August 26. Financials, which are the largest sector on the TSX, finished the day in the red but managed to avoid the most severe corrections we saw in other spaces.
TD Bank (TSX:TD)(NYSE:TD) is the second-largest of the Big Six Canadian bank stocks, right behind Royal Bank. Today, I want to take a snapshot of this bank stock and discuss why it may be the best one to own in the final quarter of 2022.
This bank stock unveiled its third quarter fiscal 2022 earnings on August 25. Unlike some of its peers, TD Bank beat analyst expectations and delivered adjusted net income of $11.3 billion or $6.18 per share in the year-to-date period. That was up from $10.7 billion or $5.83 per share in the previous year.
One of my favourite points for TD Bank is its significant exposure to the United States retail banking space. In Q2 2022, TD Bank delivered net income growth of 6% in its Canadian Retail banking segment and 11% net income growth in its U.S. Retail banking segment. The Canadian Retail banking segment was bolstered by banking and insurance volume growth and improved profit margins from rising interest rates. Its U.S. Retail segment experienced strong loan and deposit growth in the second quarter.
Shares of TD Bank possess a favourable price-to-earnings ratio of 11 at the time of this writing. Better yet, it offers a quarterly dividend of $0.89 per share. That represents a 4.1% yield.
