TFSL Stock: 8%-Dividend-Yielding Gem Backed by Solid Financials
March 10, 2025
TFSL Stock Offers Something Very Valuable to Income Investors
In today’s volatile market, with sticky inflation and economic uncertainty, income investors are rigorously on the lookout for stable dividend stocks that offer both consistency and the potential for capital appreciation. One such stock that stands out in the current landscape is TFS Financial Corp (NASDAQ:TFSL).
TFSL stock isn’t anything flashy, but it does offer something valuable to income-focused investors: an inflation-crushing dividend yield.
At a time when financial companies are seeing headwinds get stronger, TFSL stock continues to deliver a consistent stream of income to shareholders. Plus, this regional bank has strong financials and a conservative business model, essentially making it a low-risk, decent return opportunity.
What Does TFS Financial Corp Do?
TFS Financial Corp operates as the holding company for Third Federal Savings and Loan, a regional bank headquartered in Cleveland, Ohio.
This regional bank primarily focuses on residential mortgage lending, offering home purchase and refinance loans, home equity loans, and other related financial services.
Beyond mortgage lending, TFS Financial offers savings, money market, checking, individual retirement, and other qualified plan accounts, and certificates of deposit (CDs). In addition, the company offers escrow and settlement services. (Source: “Profile,” Yahoo! Finance, last accessed March 4, 2025.)
The bank operates through a network of branches and online services primarily focused on individuals rather than large commercial clients.
TFS Financial isn’t anything like a major commercial bank with complex financial products and risky investment. Its business is relatively simple and transparent. It focuses on traditional banking services and aims to make money facilitating those services.
Strong Financial Position Makes TFSL Stock a Compelling Play
TFS Financial Corp has a very strong financial position, which makes TFSL stock a compelling opportunity. This regional bank is great at making loans and maintaining a low loan default rate.
Total assets at the bank stood at $17.09 billion as of December 31, 2024.
Looking at the quality of loans: at the end of its most recent quarter, TFS Financial had an allowance for credit losses of $97.8 million, or 0.64% of total loans receivable.
Regarding what’s ahead and the steps the regional bank is taking, Marc A. Stefanski, the chairman and chief executive officer of TFS Financial, said, “We’ve also developed creative deposit products, leading to more than $350 million growth in our promotional CDs in December alone. Additionally, our Tier I capital ratio remains a source of strength at nearly 11%. As I look forward in 2025, I am encouraged by the economic forecast, interest rates, and their effect on the housing industry.” (Source: “TFS Financial Corporation Reports Earnings Growth in First Quarter Fiscal 2025,” TFS Financial Corp, January 30, 2025.)
TFSL Stock Offers a High Dividend Yield
One of the most attractive aspects of TFSL stock is the dividend.
In an environment where higher income opportunities are rare, TFSL stock has a dividend yield of 8.58%, or pays $1.13 per share in quarterly payments of $0.2825 per share.
In recent years, throughout the health crisis of 2020 and collapse of regional banks like Silicon Valley Bank, TFSL stock has paid investors a consistent dividend like clockwork. TFS Financial’s dividend payout remains manageable, too, demonstrating that its management is shareholder-friendly and doesn’t put its balance sheet on the line to be that way.
As business conditions improve, it wouldn’t be shocking to see TFSL stock pay more. Back in 2008, the regional bank paid a quarterly dividend of $0.05 per share. Now it’s at $0.2825 per share. This represents an increase of over 400% in quarterly dividends.
The Low Down on TFSL Stock
TFSL stock offers an attractive dividend yield that’s backed by a solid financial foundation. This is certainly not a growth stock, but its defensive nature makes it a compelling for investors looking to generate consistent returns with relatively lower risk.
One has to wonder if that’s what the top three institutional investors, The Vanguard Group, BlackRock Inc, and Renaissance Technologies LLC, think as well. Combined, these three investors hold over 11 million shares of TFSL stock.
