Q: In the coming years, GIC rates will likely return to their previous norms, making it rare to find a GIC offering 5% or higher. I am considering increasing my holdings of TD shares in my non registered income portfolio instead of keeping too much cash. My theory is that TD has always been, and continues to be, a reputable bank that generates good profits. I believe TD shares are currently at a relatively low point, and I am thinking of giving them a heavier weighting in my portfolio. Do you agree? Thanks for your insights.
5i Research Answer:
While we cannot comment on personal position sizes, we do think TD works its way higher over the next two years or so. Sentiment of course has shifted and the bank has work to do (see other comments posted in the Q&A today) but we do not have concerns over the dividend and the stock is very cheap on a historical valuation basis. Consensus still calls for some earnings growth next year as well.