Definitive Analysis
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TFS Financial Corporation (TFSL)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$6.44 - $14.39$9.32
Multi-Stage$5.32 - $5.80$5.56
Blended Fair Value$7.44
Current Price$13.18
Upside-43.57%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS1.43%11.81%0.210.210.210.210.200.200.180.130.100.08
YoY Growth--0.98%1.13%-0.01%2.93%2.11%9.91%34.11%35.80%18.34%20.13%
Dividend Yield--1.61%1.68%1.42%1.45%1.13%1.12%0.92%0.83%0.66%0.44%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)90.96
(-) Cash Dividends Paid (M)59.53
(=) Cash Retained (M)31.43
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)18.1911.376.82
Cash Retained (M)31.4331.4331.43
(-) Cash Required (M)-18.19-11.37-6.82
(=) Excess Retained (M)13.2320.0624.60
(/) Shares Outstanding (M)279.69279.69279.69
(=) Excess Retained per Share0.050.070.09
LTM Dividend per Share0.210.210.21
(+) Excess Retained per Share0.050.070.09
(=) Adjusted Dividend0.260.280.30
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.86%5.86%6.86%
Fair Value$6.44$9.32$14.39
Upside / Downside-51.11%-29.32%9.19%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)90.9696.29101.94107.92114.25120.95124.57
Payout Ratio65.45%70.36%75.27%80.18%85.09%90.00%92.50%
Projected Dividends (M)59.5367.7576.7386.5397.21108.85115.23

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.86%5.86%6.86%
Year 1 PV (M)61.5262.1062.69
Year 2 PV (M)63.2564.4765.69
Year 3 PV (M)64.7766.6468.54
Year 4 PV (M)66.0668.6271.25
Year 5 PV (M)67.1670.4373.82
PV of Terminal Value (M)1,165.981,222.641,281.49
Equity Value (M)1,488.741,554.901,623.48
Shares Outstanding (M)279.69279.69279.69
Fair Value$5.32$5.56$5.80
Upside / Downside-59.61%-57.82%-55.96%

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