TFSL Stock: A Simple Business (with an Inflation-Crushing Dividend)
May 13, 2025
Why TFSL Stock Is Starting to Move
Sometimes, the best opportunities can be found in companies that keep things simple. In a market that’s flooded with hype, high-growth stories, and businesses trying to do everything at once, it could actually be more rewarding to look at names that quietly deliver consistent value. TFS Financial Corp (NASDAQ:TFSL) is one of those names.
It is very unlikely you’ve seen any headlines about this regional bank, but TFSL stock offers two things income investors love: a healthy dividend and a history of steady payouts.
For a while, TFSL stock flew under the radar, offering a solid dividend yield that most income investors would dream of. But here’s the thing: the stock is starting to move. And when a stock’s price goes up, the dividend yield comes down. So, for investors sitting on the sidelines, this might be the time to pay attention to TFS Financial.
Mind you: this is not a new pick. Since TFSL stock was profiled in Income Investors in early March of this year, the price has advanced close to 10%.
What Does TFS Financial Corp Do?
TFS Financial operates as the holding company for Third Federal Savings and Loan, a regional bank headquartered in Cleveland, Ohio. The bank operates through a network of branches and online services primarily focused on individuals rather than large commercial clients.
TFS Financial primarily focuses on residential mortgage lending, offering home purchase and refinance loans, home equity loans, and other related financial services.
Beyond mortgage lending, the regional bank 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 May 5, 2025.)
Put simply, TFS Financial isn’t like a major commercial bank with complex financial products and risky investments. Its business is relatively simple and transparent. TFS focuses on traditional banking services and aims to make money facilitating those services.
Recent Financials Suggest this Pick’s Worth the Investment?
On April 30, 2025, TFS Financial reported its financial results for the first quarter of 2025, ended on March 31, and there were encouraging data across the board.
Interest income grew, suggesting that the regional bank’s able to charge higher interest on the loans it makes.
The company’s provision for credit losses was low at just $1.5 million. TFS Financial’s total loan book stands at just over $15.0 billion.
The profitability streak at the regional bank also continues: TFS Financial reported net income of $21.0 million, or $0.07 per share, for the quarter ended March 31, 2025. This is following $22.4 million in net income, or $0.08 per share, for the quarter ended December 31, 2024.
How are the business conditions?
Marc A. Stefanski, the company’s chairman and chief executive officer, said, “My optimism for this year continues to be reinforced by the success we have seen so far, and that our fiscal earnings to date this year are the best we’ve seen since 2021. Our net interest margin increased nearly 10 basis points to 1.75% and commitments to originate and acquire first mortgages and equity loans and lines of credit have increased 40% over last quarter. We continue to exceed the threshold to be considered well-capitalized, our Tier 1 leverage ratio at 10.92% improved by three basis points compared to last quarter.” (Source: “TFS Financial Reports Second Quarter and 2025 Fiscal Year-To-Date Results,” TFS Financial Corp, April 30, 2025.)
With all this said, keep one thing in mind: a company’s financial performance is highly correlated with its stock performance. So, if TFS Financial continues to give a robust financial performance, it’s hard to imagine TFSL stock remaining low for long.
TFSL’s Dividend: Get It While It’s Still High
Like clockwork, TFSL shareholders get paid a dividend of $0.2825 per share.
In the first quarter of 2025, TFS Financial declared the same dividend amount. Assuming that’s the pace for the rest of 2025, then it means a total dividend of $1.13 per share on an annual basis. This puts the dividend yield on TFSL stock at around 8.3%.
Here’s something else worth considering: the yield on TFSL stock may not remain low for long, as the stock price has been making strong strides to the upside since the regional bank reported its financial performance for the first quarter of 2025.
TFSL stock has crossed above its 50-week and 200-week moving average (MA), suggesting that the intermediate-term and long-term trends are now pointing upwards and bullish sentiment prevails.
A higher TFLS stock price will bring the dividend yield down.
Chart courtesy of StockCharts.com
The Lowdown on TFSL Stock
TFSL stock doesn’t really make the headlines. It’s a relatively small regional bank that’s firing on all cylinders.
TFS Financial is reporting a solid financial performance: consistent interest income, a low provision for credit losses, a growing loan portfolio, and robust profits. And, in the process, it is rewarding investors with a frothy dividend yield.
Lastly, TFSL stock is trusted by institutional investors. As per the most recent data, 243 institutional investors own close to 91% of all outstanding shares. The top three institutional owners of TFSL stock are The Vanguard Group Inc, BlackRock Inc, and Renaissance Technologies, LLC. Combined, these companies own close to 11.5 million shares’ worth. (Source: “Holders,” Yahoo! Finance, last accessed May 5, 2025.)
