This High-Yield Dividend Stock Could Be 1 to Hold Forever
The Canadian central bank recently surprised the world by enacting a 100 basis point rate hike. That has investors worried that central banks are behind the curve when it comes to inflation and that their belated efforts to reduce it could plunge global economies into a recession.
That's why bank stocks like Toronto-Dominion Bank (NYSE: TD) have been trending lower, since neither outcome would be particularly good for these vital financial institutions. But that's an opportunity for long-term investors to add a generous 4.3% yield to their passive income stream.
Toronto-Dominion makes money in a few different ways, but one of the bank's important focuses is on simple relationship banking. That means that it takes in money from customers in the form of deposits and lends out the money to other customers for things like buying a home (mortgages). It earns the difference between the rates it pays depositors and the rates it charges on loans. That's a huge simplification of the banking business, but it gets to the core of what Toronto-Dominion does.
Source Fool.com
