TFS Financial: Income Play With Unique Ownership Structure

Diesel
3.26K Followers

Summary

  • TFS Financial Corporation is a retail bank with a unique stock ownership structure, paying dividends only to minority shareholders.
  • Due to the limited number of shares eligible for dividends, TFSL can support a dividend yield of 8%.
  • The company's earnings and book value differ depending on whether all shares or minority shares are considered, impacting perceptions of dividend sustainability and stock valuation.
  • The dividend yield is nice and well-supported but dividend growth is lacking which may turn off some investors.

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TFS Financial Corporation (NASDAQ:TFSL) is a retail bank that collects deposits and issues loans to individuals such as mortgages. The bank has been around since 1938 and it's still run by the Stefanski family which founded

This article was written by

Diesel
3.26K Followers
I own separate portfolios for separate goals. I have one portfolio where I have nothing but income plays, another portfolio where I have nothing but growth stocks. I also have another portfolio where I run my options plays. I try not to mix different portfolios because they all have different goals and purposes. Sometimes one of my portfolios outperform other times other do. I am a big believer of diversification of not only assets but also methods and investment philosophies. Diversification is not simply buying 20 different stocks, it is applying different methods to different goals that fit to serve an investor's short term and long term targets. I am a "long only" investor and stay away from shorting companies. I will also do a lot of delta-neutral options plays where I will try to benefit from a stock or funds lack of movement. Also a huge fan of options plays and strategies including but not limited to covered calls, iron condors, butterflies, calendar spreads, call-put spreads. I've probably tried every options play there is, sometimes with success, sometimes with failure. At Seeking Alpha, I mostly analyze and write about stocks and funds that I own or I plan on owning. I rarely ever write about a stock or fund I at least don't have intention of owning some day.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of TFSL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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