Saturday, February 16, 2013
Replaced HNZ with TD
After selling HNZ, I purchased 21 shares of TD in my ROTH IRA for $82.42 per share. I like Toronto-Dominion Bank because I trust them. TD has been paying dividends since 1857... try to wrap your head around that! That is freaking pre-civil war people! Pretty crazy. They didn't cut the dividend during the recent financial meltdown which is also very important to me. Even though TD is Canadian they do a lot of business in the U.S. In a way I feel like I'm sort of getting an American bank run the Canadian way. If the housing market does implode in Canada TD has diversified into the U.S. too. I have confidence in this institution. If dividends don't lie... 156 years of dividends is the truth.
TD shares are undervalued by pretty much every measure I use. DDM, average historical p/e, FAST graphs, morningstar, etc. I still have a buy price of $80 on this stock but decided to pay a little bit extra since I was forced to sell Heinz.
In the end this transaction will increase my yearly passive income by only $15. It's not very significant. TD should grow dividends at a pace that meets or exceeds what HNZ would have done.
I'd like to pick up another company in the food industry now that I'm left with just General Mills. I've started looking at KRFT which is a powerhouse collection of brands. I need to learn more about the business, specifically the dividend policy. I started listening to KRFT conference calls. I'm impressed so far.