How TD’s Bigger Buybacks And Dividend Shift At Toronto-Dominion Bank (TSX:TD) Has Changed Its Investment Story

• The Toronto-Dominion Bank recently reported fourth-quarter and full-year 2025 results, with full-year net income of CA$20.54 billion and basic earnings per share from continuing operations of CA$11.57, alongside declaring a quarterly common dividend of CA$1.08 per share payable on January 31, 2026.
• On the same day, TD also confirmed further progress on capital returns through preferred share dividends and completion of CA$6.10 billion of share repurchases, collectively signaling an emphasis on returning excess capital to shareholders.
• Now we’ll examine how TD’s shift to semi-annual dividend reviews and extensive buybacks may influence its existing investment narrative.

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Toronto-Dominion Bank Investment Narrative Recap

To own TD Bank, you generally need to believe in the resilience of its diversified North American banking franchise and its ability to convert that scale into dependable earnings and dividends. The shift to semi-annual dividend reviews and confirmation of CA$6.10 billion in buybacks reinforce capital return as a short term focus, while the biggest risk remains that forecast earnings and revenue declines could limit how flexible TD can be if operating conditions become less supportive.

The move to a semi-annual dividend review, alongside the declared CA$1.08 common dividend for the quarter ending January 31, 2026, is the clearest link to the current narrative around TD’s capital strength and shareholder returns. It sits against consensus expectations for declining earnings over the next few years, which makes the bank’s strong recent profitability and high quality earnings an important cushion if results come in weaker than hoped.

Yet even with robust capital returns, investors should be aware that earnings are forecast to decline over the next three years and that...

Read the full narrative on Toronto-Dominion Bank (it's free!)

Toronto-Dominion Bank's narrative projects CA$62.5 billion revenue and CA$14.2 billion earnings by 2028. This implies a 0.5% yearly revenue decline and an earnings decrease of CA$6.1 billion from CA$20.3 billion today.

Uncover how Toronto-Dominion Bank's forecasts yield a CA$124.93 fair value, in line with its current price.

Exploring Other Perspectives

Five members of the Simply Wall St Community currently place TD Bank’s fair value between CA$122.61 and CA$164.72, reflecting a wide spread of individual views. You can weigh those against the risk that consensus forecasts point to declining earnings over the next few years, which may influence how sustainable today’s level of capital returns proves to be.

Explore 5 other fair value estimates on Toronto-Dominion Bank - why the stock might be worth as much as 30% more than the current price!

Build Your Own Toronto-Dominion Bank Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Toronto-Dominion Bank research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Toronto-Dominion Bank research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Toronto-Dominion Bank's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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