TFS Financial Corp's Dividend Analysis
In This Article:
Understanding the Dividend Dynamics of TFS Financial Corp (NASDAQ:TFSL)
TFS Financial Corp (NASDAQ:TFSL) recently announced a dividend of $0.28 per share, payable on 2023-12-13, with the ex-dividend date set for 2023-11-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into TFS Financial Corp's dividend performance and assess its sustainability.
What Does TFS Financial Corp Do?
-
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
-
How to calculate the intrinsic value of a stock?
TFS Financial Corp is the holding company for the Third Federal Savings and Loan Association of Cleveland. The company's ownership in the savings and loan association is its primary business activity. The association's principal business consists of originating and servicing residential real estate mortgage loans and attracting retail savings deposits. It does so by offering products with competitive rates and yields. The company also operates Third Capital, a wholly owned subsidiary that serves as a holding company or as an investor in vehicles such as private equity funds. Third Capital has interests in lease transactions of commercial buildings, title agencies providing escrow and settlement services, and reinsurance of private mortgage insurance on residential loans.
A Glimpse at TFS Financial Corp's Dividend History
TFS Financial Corp has maintained a consistent dividend payment record since 2014, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down TFS Financial Corp's Dividend Yield and Growth
As of today, TFS Financial Corp currently has a 12-month trailing dividend yield of 8.29% and a 12-month forward dividend yield of 8.29%, suggesting an expectation of the same dividend payments over the next 12 months. Over the past three years, TFS Financial Corp's annual dividend growth rate was 3.50%. Extended to a five-year horizon, this rate increased to 15.00% per year. Based on TFS Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of TFS Financial Corp stock as of today is approximately 16.67%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, TFS Financial Corp's dividend payout ratio is 4.35, which may suggest that the company's dividend may not be sustainable. TFS Financial Corp's profitability rank, as of 2023-09-30, is 4 out of 10, suggesting that the dividend may not be sustainable, despite the company reporting positive net income each year over the past decade.