TD Bank (TSX:TD)(NYSE:TD) is the second-largest of the Big Six Canadian bank stocks. Banks are set to go
through the third earnings season in late August. For its part, TD Bank will unveil its third quarter fiscal
2022 results on August 25.
This bank boasts the largest United States retail banking footprint of the Big Six. That has provided TD
Bank with a strong boost as the U.S. banking sector has delivered huge profits in recent years. However,
like the Canadian financial space, uncertainties are piling up in the face of aggressive rate tightening
from both nation’s central banks. That will likely stifle credit growth, especially in the mortgage space, in
the near term. On the other hand, higher rates should lead to improved profit margins.
In the first six months of 2022, the bank posted adjusted net income of $7.54 billion or $4.09 per
adjusted diluted earnings per share – up from $7.15 billion or $3.86 per adjusted EPS in the year-to-date
period in 2021. Canadian and United States Retail Banking delivered net income growth of 2% and 4%,
respectively. Investors may want to brace for a slowdown in both sectors in the quarter ahead.
Despite the expected slowdown, I’m still looking to stack TD Bank in the second half of 2022. Shares of
TD Bank possess an attractive price-to-earnings ratio of 10. It offers a quarterly dividend of $0.89 per
share. That represents a very solid 4.1% yield.
