Important news for shareholders and potential investors in TCF Financial Corporation (NYSE:TCF): The dividend payment of $0.08 per share will be distributed into shareholder on 01 December 2017, and the stock will begin trading ex-dividend at an earlier date, 14 November 2017. What does this mean for current shareholders and potential investors? Below, I will explain how holding TCF can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for TCF Financial
How I analyze a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does TCF Financial fit our criteria?
TCF Financial has a payout ratio of 26.49%, meaning the dividend is sufficiently covered by earnings. Looking forward, analysts expect TCF to pay out 25.46% of its earnings and dividends yield to be around 1.94%. Furthermore, EPS should increase to $1.35. This means the company should be able to continue to payout dividends. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from TCF Financial have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends. In terms of its peers, TCF generates a yield of 1.69%, which is on the low-side for banks stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in TCF right now, in terms of its dividend attributes. It may be worth exploring other dividend stocks as alternatives to TCF or even look at high-growth stocks to complement your steady income stocks. I recommend continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? After digging a little deeper into TCF’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, TCF could still be offering some interesting investment opportunities. As with all investments, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Check our latest free fundmental analysis to explore other aspects of TCF.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.