This Dividend Stock Is Set to Beat the TSX Again and Again

The stock market may go through cycles, but reliable dividend stocks tend to create their own rhythm over time. While growth stocks tend to grab most of the headlines during market rallies like the one we saw in 2025, income stocks often do the real heavy lifting throughout full market cycles. Investors who focus on dependable cash flow usually look for companies that have already proven themselves through different economic conditions.

Toronto-Dominion Bank (TSX:TD) fits that description well. It offers a great mix of dividend income, scale, and long-term growth potential that many TSX investors look for when building a core portfolio. And TD’s recent performance only adds to that appeal. In this article, I’ll talk about why this top TSX dividend stock continues to look well-positioned to outperform the TSX year after year.

A top TSX dividend stock built for consistency

Before exploring other key fundamental factors, let’s take a quick look at TD Bank’s business model and stock performance. As one of the largest banks in the country, it operates across Canadian personal and commercial banking, U.S. retail banking, wealth management and insurance, and wholesale banking segments. This broad setup allows the bank to generate income from multiple sources instead of relying on a single market.

After rallying by 69% in 2025, TD stock is currently trading at $129.36 per share with a market cap of nearly $218.6 billion. By comparison, the TSX Composite benchmark climbed 28.4% during the year. The bank also rewards its investors with quarterly dividends and currently offers an annualized dividend yield of roughly 3.3%, enhancing its appeal as a top TSX dividend stock to buy for income-focused investors.

Currently, this TSX dividend stock is trading just below its all-time high, showing sustained momentum rather than a short-lived spike. This solid performance clearly reflects investors’ growing confidence in TD’s ability to grow earnings while continuing to reward shareholders through dividends. For investors seeking a top TSX dividend stock, this combination of income and capital appreciation has been hard to ignore. Now, let’s take a closer look at its real numbers.

Earnings growth adds another layer of strength

TD’s recent financial results help explain why its stock continues to hold its ground. In the fourth quarter of fiscal 2025 (ended in October), TD delivered adjusted earnings of $2.18 per share, up sharply YoY (year over year).

Similarly, the bank’s adjusted net income for the quarter rose 22% YoY to $3.9 billion. Its Canadian personal and commercial banking posted record revenue, backed by higher loan and deposit volumes. TD’s U.S. retail earnings also improved as lower provisions for credit losses and balance sheet restructuring began to show benefits.

Meanwhile, its wealth management and wholesale banking added further support with stronger fee and trading income.

A strategy focused on long-term returns

These solid financials explain why TD looks well-positioned to keep beating the TSX over time. The bank ended fiscal 2025 with a common equity tier 1 capital ratio of 14.7%, giving it a strong capital cushion.

In 2026, the bank expects to focus on expanding digital engagement, increasing fee-based income, and controlling costs. These efforts could continue to support its stable earnings growth while helping it maintain a reliable dividend. That’s why, for investors looking for a top TSX-listed dividend stock in the new year, TD’s strong combination of dividend income, resilience, and disciplined execution continues to make it one of the most attractive names on the exchange.

The post This Dividend Stock Is Set to Beat the TSX Again and Again appeared first on The Motley Fool Canada.

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More reading

• This Dividend Stock is Set to Beat the TSX Again and Again
• 1 Dividend Stock I’ll Be Checking in On Closely in 2026
• TD vs. Royal Bank: Which Stock Offers Investors More for 2026?
• New Year, New Portfolio: 2 Canadian Stocks to Own to Diversify Well in 2026
• Here’s What’s Driving the TSX’s Top-Performing Stocks

Fool contributor Jitendra Parashar has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.