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Is Capitol Federal Financial Inc (NASDAQ:CFFN) A Smart Choice For Dividend Investors?

Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Capitol Federal Financial Inc (NASDAQ:CFFN) has returned to shareholders over the past 10 years, an average dividend yield of 6.00% annually. Should it have a place in your portfolio? Let’s take a look at Capitol Federal Financial in more detail. View out our latest analysis for Capitol Federal Financial

5 checks you should do on a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

  • Is their annual yield among the top 25% of dividend payers?

  • Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

  • Has the amount of dividend per share grown over the past?

  • Does earnings amply cover its dividend payments?

  • Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

NasdaqGS:CFFN Historical Dividend Yield June 22nd 18
NasdaqGS:CFFN Historical Dividend Yield June 22nd 18

How does Capitol Federal Financial fare?

The current trailing twelve-month payout ratio for the stock is 47.04%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

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If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Dividend payments from Capitol Federal Financial have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.

Compared to its peers, Capitol Federal Financial generates a yield of 6.20%, which is high for Mortgage stocks.

Next Steps:

Whilst there are few things you may like about Capitol Federal Financial from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three pertinent factors you should look at:

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

  2. Historical Performance: What has CFFN’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  3. 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.