Is It Too Late To Buy TD Bank Stock?

Shares of Toronto-Dominion Bank (TSX:TD)(NYSE:TD) have soared close to 60% in the past 12 months. The top North American bank has performed exceptionally well despite challenging macroeconomic conditions and loads of uncertainty ahead.

While shareholders have generated terrific returns, for people looking to buy the stock, it may not be nearly as attractive to do so. Currently, TD's stock trades at 18 times its trailing earnings, which is a high multiple for a bank stock. It's price-to-book multiple is also higher than normal at around 2.4.

Meanwhile, its dividend yield has come down due to the rise in share price, now paying investors 2.7%. In the past, it wasn't uncommon to see TD's yield being over 4%. However, with the stock trading not only around a 52-week-high but also its all-time high, investors who buy shares of TD are doing so at extremely elevated levels.

The risk is that buying the top bank stock at a time when economic conditions are questionable and trade uncertainty between Canada and the U.S. may weigh on the two economies. There's the potential for a correction in the not-too-distant future, if there's a recession in either country.

While TD is a solid long-term investment, there may be better options for investors to consider these days, which offer a bit better value and higher dividends. TD's business is rock solid, but at a high valuation, there may not be much room for the stock to rise a whole lot higher; investors may be better off passing on TD for the time being.

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