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Stifel Financial Hikes Dividend by 25%: Is It Worth a Look?

Zacks Equity Research

Stifel Financial Corporation SF recently hiked its quarterly cash dividend by 25%, from the prior-quarter payout, to 15 cents per share. The dividend will be paid on Mar 15, to shareholders of record as of Mar 1.

Based on the latest dividend, the company's dividend yield stands at nearly 1.1%, considering last day’s closing price of $53.01. Stifel Financial had announced its first regular dividend of 10 cents per share in August 2017. Subsequently, it was hiked by 20% in February 2018.  

Further, the company has an existing share-repurchase authorization program. As of Dec 31, 2018, nearly 3.7 million shares remain to be repurchased under this plan.

Concurrently, the company also announced a dividend of $390.625 per share of the Series A Preferred Stock Outstanding for the period from Dec 15, 2018, up to, but excluding Mar 15, 2019. The dividend will be paid on Mar 15, to shareholders of record as on Mar 1.

So, is this Zacks Rank #2 (Buy) stock worth a look, based on the latest dividend hike? Let’s dig deeper into its fundamentals and financial strengths to understand better.

Earnings Growth: Stifel Financial witnessed earnings growth of 14.5%, in the last three to five years. This earnings momentum is likely to continue in the near term as indicated by the company’s projected earnings per share (EPS) growth rate of 2.3% for 2019 and 6.5% for 2020.

In addition, the company recorded average positive earnings surprise of 8%, in the trailing four quarters.

Also, Stifel Financial’s long-term (three-five years) estimated EPS growth rate of 8% promises rewards for investors, over the long run.

Superior ROE: Stifel Financial’s trailing 12-month return on equity (ROE) reflects its superiority, in terms of utilizing shareholders’ fund. The company’s ROE of 15.09% compares favorably with the industry’s 12.72%.

Trades at a Discount: Based on its price-to-book (P/B) and price-to-earnings (P/E) ratio, Stifel Financial is trading at a discount to the industry it belongs to. The company’s P/B ratio of 1.24 compares favorably to the industry average of 1.50. Furthermore, its P/E ratio of 9.69 comes in lower than the industry average of 12.78.

Moreover, Stifel Financial has a Value Score of A. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of ‘value traps’ and identify stocks that are truly trading at a discount.

Over the past three months, shares of the company have rallied 6.8%, as against the 3.5% decline registered by the industry.


Other Key Picks

Evercore Inc’s EVR shares have gained 10.3% over the past three months. The stock currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

LPL Financial Holdings, Inc.’s LPLA shares have appreciated 21.4%, in three months’ time. At present, the stock holds a Zacks Rank of 2.

Ladenburg Thalmann Financial Services Inc’s LTS shares have jumped 5.5% in the past three months. Currently, it carries a Zacks Rank #2.

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