TFS Financial Hits 52-Week High - Analyst Blog

Shares of TFS Financial Corp (TFSL) achieved a new 52-week high, touching $13.03 on April 8. However, the stock closed the session at $12.96, reflecting a solid year-to-date return of 6.9%. The trading volume for the session was 392,955 shares.

TFS Financial currently has a Zacks Rank #2 (Buy), indicating that the stock still has potential to move higher. The company has delivered positive earnings surprises in 2 of the trailing 4 quarters with an average beat of 50.0% for the year. Further, the year-over-year earnings growth estimate for the company now stands at 16.7% for 2014.

Growth Drivers

The recent termination of the Memoranda of Understanding (MOU), authorization of stock repurchase program, a possible resumption of dividend and decent first-quarter fiscal 2014 results primarily drove the stock price to reach this level.

On April 2, 2014, TFS Financial received a written notification stating that the MOU imposed by the Office of Thrift Supervision, which was effective from Feb 7, 2011, had been terminated by the Federal Reserve Bank of Cleveland. This removed restrictions on TFS Financial's ability to buy back its own shares and pay dividend to shareholders.

Following the news, the company announced buyback authorization of up to 5 million common shares. Also, the company is now considering resuming its dividend payout.

On Jan 30, 2014, TFS Financial came out with first-quarter fiscal 2014 earnings (ended Dec 31) of 5 cents per share, which were in line with Zacks Consensus Estimate. The reported figure was higher than 4 cents earned in the prior-year quarter.

Results were aided by higher net income driven by continuous fall in provision for loan losses, strong capital ratios and improved credit quality.

However, a slight rise in the operating expenses and decrease in both total revenue and net interest income were headwinds. Moreover, non-interest income declined in the last reported quarter.

Some stocks that are worth-considering in this space include Banner Corp. (BANR), Cape Bancorp, Inc. (CBNJ) and Capitol Federal Financial, Inc. (CFFN). While Banner sports a Zacks Rank #1 (Strong Buy), Cape Bancorp and Capitol Federal Financial carry a Zacks Rank #2 (Buy).