TFSL Stock: The Underrated Bank Paying an 8%+ Dividend Yield
September 12, 2025
A Great Income Pick That’s Hidden in Plain Sight?
When it comes to finding reliable income in today’s market, most investors tend to choose the usual income stocks like utilities, real estate investment trusts, and blue-chip dividend aristocrats. But sometimes the best opportunities hide in plain sight, in sectors that have been beaten down or overlooked.
That’s exactly what I see happening with regional banks right now, and TFS Financial Corp (NASDAQ:TFSL) could be one of the most interesting plays in this space.
It’s important to understand that not all regional banks are created equally. When considering one in terms of an investment, one must make sure that the regional bank has been around long enough to weather multiple interest rate cycles and that it keeps conservative underwriting standards and has a long track record of paying investors in the form of dividends.
TFSL stock checks all the boxes.
What Does TFS Financial 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, TFSL Financial offers escrow and settlement services. (Source: “Profile,” Yahoo! Finance, last accessed September 10, 2025.)
It’s important to understand that TFS Financial doesn’t operate like a major commercial bank. It doesn’t offer complex financial products or hold risky investments. You know the ones that Warren Buffett calls “weapons of mass financial destruction.” Its business is straightforward and transparent. TFS Financial engages in traditional banking services and aims to make money while providing those services.
Surviving Interest-Rate Cycles Is in TFS Financial’s DNA
If you listen to financial press, it has very likely you have heard about how interest rates have peaked and that, given the recent inflation figures, odds are increasing that interest-rate cuts could be around the corner.
With this in mind, one might be wondering what’s ahead for the overall financial sector, and more specifically for TFSL stock. Wouldn’t the margins at TFS Financial come under pressure?
You see, TFS Financial has already seen decades of rate cycles. The regional bank “lived” through the sky-high rates of the 1980s, the low-rate environment after the global financial crisis, and the sharp hikes of the post health-care crisis of 2020.
Management at TFS Financial has built flexibility into its loan book. It offers adjustable-rate products and shorter-term loans, and has very conservative underwriting standards. This gives the bank room to maneuver.
If TFS Financial’s track record is an indication of anything, know that this isn’t one of those banks that wakes up one morning shocked by its interest-rate risk.
TFSL Stock’s Dividend Track Record Is Unmatched
TFSL stock really shines when it comes to dividends. Its track record is unmatched.
Currently, the regional pays a quarterly dividend of $0.2825 per share. On an annualized basis, this is about $1.13 per share, which translates into a dividend yield of 8.4%.
Chart Courtesy of StockCharts.com
For a bank of this size, that’s an eye-popping yield. But it’s not just the number that matters. You must pay attention to the consistency.
TFS Financial has been returning cash to shareholders consistently no matter how the economy or the financial world looks. Even when interest rates were near zero, TFSL stockholders got paid. Even when interest rates reached multi-year highs, its shareholders got paid. Even when there was a financial crisis, those who owned TFSL stock got paid.
Over years, the dividends have increased, too.
In 2015, TFSL stock paid a dividend of $0.34 per share; in 2025, it’s on track to pay $1.13 per share. This represents an increase of 232%!
The Lowdown on TFSL Stock
For investors who like collecting high dividends from a conservative financial institution, TFSL stock is deserving of at least a good look. It’s not going to double or triple overnight—but that’s the point. This stock is all about predictable income and a steady performance.
Year to date, TFSL stock has increased close to six percent.
Year over year, the stock price is only up less than one percent.
This bank stock remains ignored by investors chasing the few hot names. Once those stocks run out of steam, investors could be rushing to seek safety in places where they can preserve wealth. Regional banks like TFS Financial could be the place where many park their money.
TFSL stock is heavily owned by institutional investors as well. As per the most recent data, close to 92% of all outstanding shares are held by institutional investors, including The Vanguard Group, BlackRrock Inc., and Renaissance Technologies, LLC. (Source: “Holders,” Yahoo! Finance, accessed September 10, 2025.)
