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Is Territorial Bancorp Inc (NASDAQ:TBNK) A Good Pick For Income Investors?

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Rowena Gregory
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A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. In the past 8 years Territorial Bancorp Inc (NASDAQ:TBNK) has returned an average of 3.00% per year to investors in the form of dividend payouts. Let’s dig deeper into whether Territorial Bancorp should have a place in your portfolio. See our latest analysis for Territorial Bancorp

Here’s how I find good dividend stocks

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

  • Is it the top 25% annual dividend yield payer?

  • Has it paid dividend every year without dramatically reducing payout in the past?

  • Has it increased its dividend per share amount over the past?

  • Can it afford to pay the current rate of dividends from its earnings?

  • Will it be able to continue to payout at the current rate in the future?

NasdaqGS:TBNK Historical Dividend Yield Mar 1st 18
NasdaqGS:TBNK Historical Dividend Yield Mar 1st 18

Does Territorial Bancorp pass our checks?

The current trailing twelve-month payout ratio for the stock is 49.59%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect TBNK’s payout to remain around the same level at 45.53% of its earnings, which leads to a dividend yield of around 3.28%. Furthermore, EPS should increase to $2.12. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider Territorial Bancorp as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Territorial Bancorp produces a yield of 3.94%, which is high for Mortgage stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Territorial Bancorp as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three important factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for TBNK’s future growth? Take a look at our free research report of analyst consensus for TBNK’s outlook.

  2. Valuation: What is TBNK worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether TBNK is currently mispriced by the market.

  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.


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.