2024-06-28 08:30:00 ET
Summary
- TFS Financial Corporation has a unique ownership structure with majority owners not receiving dividends, making the high payout ratio misleading.
- Rising interest rates had mixed effects on TFSL, increasing interest income but reducing demand for new loans and refinancing deals.
- TFSL offers a 9% dividend yield, fully supported by income, but has not raised dividends in 4 years, leading to mixed investor reactions.
- Moving forward, the bank will have to be very careful about how it navigates these uncertain times we are in right now.
TFS Financial Overview
TFS Financial Corporation ( TFSL ) is an interesting regional bank that conducts majority of its business in two states: Ohio and Florida. The bank also has an interesting two tiered ownership structure where majority owners own 80% of shares and don't receive any dividends, whereas minority owners own only 20% of its shares (mainly retail investors) that receive a nice dividend. Since only 1/5th of existing shares receive dividend, the company's high payout ratio is actually misleading and its dividend is well covered....
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TFS Financial Stock: Carefully Navigating Uncertain Times