Q: is there any reason to expect meaningful growth in TD during the next year or two? I have a full position and I think the yield is down and the stock is getting tired. I am thinking of selling some (e.g. 20%) shares or selling covered calls in some at about 135/share.. What do you think of the stock going forward for the next two years?
5i Research Answer:
We think TD and the Canadian banks in general are a bit of a situation where they will likely do fine over the next year, but we would not expect returns similar to this past year. Real Estate and general economic growth in Canada should act as a weight to some degree and there is likely less of a potential support from interest rates going much lower from here. We don't think it needs to be sold 'outright' but rebalancing a bit likely makes sense at this stage.