Check out page 55 here, which shows net income for the last five years: https://www.sec.gov/ix?doc=/Archives/edgar/data/1381668/0001…
88.9 mn, 85.4 mn, 80.2 mn, 83.3 mn, 81.0 mn. The drop in EBT is sharper, from $133 mn to $100 mn.
That’s not really moving in the right direction, and it’s putting serious pressure on their ability to raise the dividend and for investors to believe that it will be there if profit falls. The payout ratio was a hefty 70% of net income. So I expect all but a token increase to be off the table, and maybe they don’t even make that, though I suspect they will.
They repurchased a minimal amount of shares in 2021, effectively none. And through various dilutive elements, minority share count is now almost back where it was in 2017.
So the only way they can raise the dividend any meaningful amount is by repurchasing stock, which they’re now unwilling to do, apparently. (Or at least for the past four years.) They have an outstanding authorization for about 11% of the stock, but it’s basically been untouched for years. And it’s backed by $285 mn at the holding company, so they do have dry powder to effect the buyback.
Otherwise, the business generally looks like it has, though of course the rate spread has narrowed considerably in the last few years, now looking mighty thin.
The best strategy here, I think, is to focus buying points when the stock is good value (maybe $15-$16 per share) and ride it to a higher valuation (65%-70% of partially converted tangible book value) and then repeat. It seems to swing back and forth every couple years.
Was the departure of Ben Stefanski from the board a sign? I’m thinking of the CEO’s comment about a decade ago when he said that the second-step conversion was for the next generation of Stefanskis.