The Toronto-Dominion Bank Fundamental Analysis
The Toronto-Dominion Bank (TD) shows moderate financial fundamentals with a PE ratio of 12.90, profit margin of 13.24%, and ROE of 11.85%. The company generates $155.7B in annual revenue with weak year-over-year growth of -2.80%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 34.3/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze TD's fundamental strength across five key dimensions:
Efficiency Score
WeakTD struggles to generate sufficient returns from assets.
Valuation Score
ExcellentTD trades at attractive valuation levels.
Growth Score
WeakTD faces weak or negative growth trends.
Financial Health Score
WeakTD carries high financial risk with limited liquidity.
Profitability Score
WeakTD struggles to sustain strong margins.
Key Financial Metrics
Is TD Expensive or Cheap?
P/E Ratio
TD trades at 12.90 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, TD's PEG of -0.61 indicates potential undervaluation.
Price to Book
The market values The Toronto-Dominion Bank at 1.55 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -0.11 times EBITDA. This is generally considered low.
How Well Does TD Make Money?
Net Profit Margin
For every $100 in sales, The Toronto-Dominion Bank keeps $13.24 as profit after all expenses.
Operating Margin
Core operations generate 16.47 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $11.85 in profit for every $100 of shareholder equity.
ROA
The Toronto-Dominion Bank generates $0.72 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Toronto-Dominion Bank produces operating cash flow of $21.29B, showing steady but balanced cash generation.
Free Cash Flow
The Toronto-Dominion Bank generates strong free cash flow of $18.02B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $10.67 in free cash annually.
FCF Yield
TD converts 4.88% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.90
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.61
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.55
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.36
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.22
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.05
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.007
vs 25 benchmark
ROCE
Return on capital employed
0.010
vs 25 benchmark
How TD Stacks Against Its Sector Peers
| Metric | TD Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.90 | 19.38 | Better (Cheaper) |
| ROE | 11.85% | 804.00% | Weak |
| Net Margin | 13.24% | -7623.00% (disorted) | Strong |
| Debt/Equity | 2.22 | 1.07 | Weak (High Leverage) |
| Current Ratio | 0.05 | 609.22 | Weak Liquidity |
| ROA | 0.72% | -20946.00% (disorted) | Weak |
TD outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Toronto-Dominion Bank's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
122.03%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
80.76%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-131.76%
Industry Style: Value, Dividend, Cyclical
Declining