Canada’s massive banks are nearly all the time nice investments to personal. The “nearly all the time” a part of that assertion is one thing that has gotten lots of consideration currently. Some have even gone as far as to counsel that traders ought to keep away from financial institution shares altogether throughout this unstable interval.

Opposite to that view, right here’s one financial institution that, regardless of latest weak spot, does maintain huge long-term potential.

Meet your subsequent massive financial institution funding

The financial institution to make you rethink the keep away from financial institution shares mindset is Toronto-Dominion Financial institution (TSX:TD). For these which can be unfamiliar, TD is the second largest of Canada’s massive banks, with each a powerful home phase and a rising worldwide arm.

The financial institution additionally boasts a wholesale banking phase in addition to an funding phase.

TD’s worldwide phase actually kicked in throughout the interval after the Nice Recession. At the moment, TD acquired a number of smaller regional gamers and stitched them collectively right into a U.S. department community.

That department community now spans from Maine to Florida alongside the east coast, with TD boasting extra branches within the U.S. than it has in Canada.

That stellar development not solely propelled TD into place as one of many prime 10 lenders within the U.S. market but additionally diversified the financial institution’s income stream outdoors of Canada.

Q2 outcomes are in

TD introduced outcomes for the second quarter final week. In that the majority latest quarter, TD reported earnings of $3.35 billion, representing a decline over the $3.81 billion reported in the identical interval final 12 months.

Regardless of that dip, each the Canadian and U.S. segments continued to point out sturdy development.

The Canadian phase reported internet earnings of $1,625 million, reflecting a rise of 4%, or $57 million. Turning to the U.S. phase, the financial institution earned $1,412, which was a 3% enchancment over the prior interval.

Maybe most telling was the announcement by TD that it might launch a share-buyback program for as much as 30 million of its shares. The repurchase-for-cancellation program works out to roughly 1.6% of the financial institution’s excellent shares. Topic to approvals, the buybacks will happen over the course of a 12 months.

Why do you have to not keep away from financial institution shares and think about TD

Investing in TD is one thing that ought to be seen as a long-term funding. The financial institution is a well-diversified operation that additionally boasts a steady and rising quarterly dividend. That dividend has been paid out with out fail for properly over a century and, as of writing, works out to a yield of 4.91%.

Potential and present traders ought to be aware that regardless of not saying a dividend hike final week, as a few of its friends did, TD has maintained an annual cadence of these will increase for properly over a decade. The one exception to that was an imposed moratorium on dividend will increase throughout the pandemic.

TD’s transfer to cancel the First Horizon deal has left the financial institution in a well-capitalized place. Aside from the 30 million share buyback not too long ago introduced, TD can nonetheless hunt down one other acquisition within the U.S. market.

And as famous above, that is just like the plan that TD beforehand executed throughout the Nice Recession, with nice success.

Briefly, TD is a stellar long-term choice that appeals to each growth- and income-seeking traders with long-term timelines. Even higher, potential traders TD can scoop up shares of the financial institution at a reduction of roughly 17% over the trailing 12-month interval.

In different phrases, it’s not precisely a good time to keep away from financial institution shares like TD. If something, it’s an excellent time to purchase the financial institution for the lengthy haul.

For my part, TD ought to be a core half of a bigger, well-diversified, long-term portfolio.