12:24 PM EST, 01/16/2025 (MT Newswires) -- (The updated version includes the Morningstar rating and fair value estimate for TD Bank.)

TD Bank is trading at a discount to fair value estimates, notes Morningstar Financial Research, which has a four-star rating and fair value estimate of $88 on the stock.

The bank is well-capitalized, with a common equity Tier 1 ratio of 12.8% as of July 2024, well above the 11% minimum. "We view the company's capital investments as exemplary, as the bank has avoided value-destroying products and expansions while pursuing sensible investments and growth opportunities, allowing it to build up one of the most highly profitable Canadian banking franchises," says Morningstar equity analyst Michael Miller.

TD has also been raising dividends consistently over the past five years, reflecting a prudent capital allocation strategy. "We assess the company's capital return strategy as appropriate; it is largely in line with peers', with a healthy focus on a dividend and some additional earnings left over for repurchases after internal investments," Miller adds. The stock's fair value was recently lowered from $90 per share to $88, due to losses tied to anti-money-laundering issues.

Price: 79.44, Change: +0.13, Percent Change: +0.16