If you’ve been watching the stock price for td lately, you’ve probably felt that weird mix of "wow, what a bargain" and "wait, why is everyone else running for the exits?" It’s a classic Canadian bank dilemma. On one hand, you have this massive, centuries-old institution that basically prints money. On the other, you have a headline-grabbing money laundering scandal in the U.S. that resulted in a staggering $3.1 billion penalty and an asset cap that essentially puts the bank in a corner.
Honestly, it’s a lot to process. As of mid-January 2026, TD is trading around $94. That’s a massive recovery from those dark days in late 2024 when it was languishing in the $70s. But does that mean the "easy money" has already been made?
Let’s get real for a second. Investing in TD isn't just about looking at a ticker. It's about understanding if a bank can grow when the biggest economy in the world—the United States—has literally told them they aren't allowed to get any bigger for a while.
The Elephant in the Room: That $3 Billion Fine and the Asset Cap
Most casual investors see a big fine and think, "Okay, they paid it, it's over." With TD, it’s not that simple. The US$3.09 billion fine they settled with the DOJ and FinCEN in October 2024 was just the tip of the iceberg. The real "ouch" is the asset cap.
The U.S. Office of the Comptroller of the Currency (OCC) imposed a $434 billion asset cap on TD’s U.S. retail operations. Think of it like a professional athlete being told they can only play at 80% speed. They’re still good, but they aren't going to break any records.
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Because of this, TD had to get aggressive with its "balance sheet optimization." Basically, they had to sell off assets and shrink their U.S. footprint by about 10% just to make sure they didn't accidentally bump into that cap. That’s why 2025 was such a "messy" year, as Morningstar analyst Maoyuan Chen put it.
Why the stock price for td is actually holding up
You’d think an asset cap would crater the stock. It didn't. In fact, TD hit an all-time high of $95.33 on January 5, 2026.
Why? Because the market hates uncertainty more than it hates bad news. Once the fine was paid and the rules were set, investors could finally model the future. Plus, the bank is still a powerhouse in Canada. Over 55% of their revenue comes from north of the border, where they have a "wide moat"—meaning it’s incredibly hard for competitors to steal their lunch.
The Dividend: Is it a Safety Net or a Siren Song?
If you're looking at the stock price for td, you're almost certainly looking at the dividend. TD recently bumped its quarterly payout to $1.08 CAD per share. That puts the yield somewhere around 3.3% to 3.6% depending on the daily fluctuation.
They also did something interesting. They moved from an annual dividend review to a semi-annual cycle. That’s bank-speak for "we want to keep shareholders happy more often."
- Current Yield: ~3.32%
- Payout Ratio: Around 36% (This is very healthy; they aren't overextending).
- 3-Year Growth Rate: 8.06%
Some people call TD a "yield trap" when the price drops, but with a payout ratio that low, the dividend is as safe as a house. The bank is literally sitting on piles of cash from selling their stake in Charles Schwab. They’re using $8 billion of that to buy back their own shares. When a company buys back its own stock, it’s like saying, "We think our stock is the best thing we can buy right now."
Raymond Chun and the New Guard
The Bharat Masrani era is officially over. Raymond Chun took the reins as CEO on February 1, 2025, which was actually earlier than originally planned.
Chun isn't some outsider brought in to clean house; he’s a 30-year veteran. He’s run the Canadian personal banking side, wealth management, and insurance. The guy knows where the bodies are buried. His big pitch to investors has been "AI and Efficiency."
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He’s targeting 6-8% EPS (Earnings Per Share) growth for fiscal 2026. To get there, he’s leaning hard into AI use cases—about 75 of them so far—that supposedly added $170 million in value last year. Is it just buzzwords? Maybe. But in a world where you can’t grow your U.S. assets, you have to find ways to make your existing assets more profitable.
What the Analysts are Whispering
If you look at the consensus, it’s a "Moderate Buy." But the range is wild. You’ve got Scotiabank raising targets to $132, while BMO Capital Markets has a target of $84.
Here’s the nuance:
- The Bulls: They see the share buybacks and the strong Canadian margins as a floor for the stock. They think the U.S. troubles are "priced in."
- The Bears: They worry about "operational risk." Cleaning up a money laundering mess isn't a one-time fix. It requires years of high spending on compliance. TD's expenses grew 10% last year, and they need to get that down to 3-4% to hit their targets.
Honestly, the stock price for td is currently a bet on management's ability to be boring. If they can stay out of the headlines and keep their Canadian customers from switching to RBC or BMO, the stock should slowly grind higher.
Practical Steps for Investors
If you're holding TD or thinking about jumping in, don't just stare at the daily chart. It’ll drive you crazy.
First, check your exposure. Because TD is such a massive part of the TSX, if you own a Canadian index fund, you already own a lot of it. Don't double-dip unless you really believe in the turnaround.
Second, watch the expense ratio. In the next quarterly report, look at the "Non-interest expenses." If that number keeps climbing, it means the AML (Anti-Money Laundering) remediation is costing more than they told us. That's your red flag.
Third, use the DRIP. TD offers a Dividend Reinvestment Plan. Sometimes they offer a discount (up to 5%) when you buy shares with your dividends. For the January 2026 payout, they aren't offering a discount because they’re buying shares on the open market, but it’s worth checking every quarter.
Lastly, pay attention to the U.S. interest rate cap talks. There’s been noise about a 10% cap on credit card interest rates in the States. Since TD has a huge U.S. credit card business, that could be a sneaky headwind that nobody is talking about yet.
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Keep an eye on those quarterly earnings. The "messy" 2025 is behind us, but the 2026 "recovery" is still being written.
Actionable Insights for Your Portfolio
- Monitor the 13% ROE Target: CEO Raymond Chun has staked his reputation on hitting a 13% Return on Equity in 2026. If they miss this in Q1 or Q2, expect the stock to face downward pressure as the "turnaround" narrative loses steam.
- Evaluate the Buyback Progress: TD is in the middle of a massive $7 billion share repurchase program. Track the "Shares Outstanding" count in their financial filings; a steady decline is a signal that the bank is effectively supporting its own stock price.
- Watch the Compliance Spend: The "Governance and Control" line item is your best friend. If TD can’t bring these costs down while maintaining their U.S. asset cap buffer, the dividend growth might stall in 2027.
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