TD Ameritrade could recover from its discounted valuation with quarterly payouts and a strong outlook for fiscal 2018. The company has recently raised its quarterly dividend payouts. It declared a dividend of $0.18 per share in July 2017 and $0.21 per share in October 2017.
Another metric that could improve TD Ameritrade’s valuation is analysts’ one-year price target for the stock. Analysts have given AMTD a target of $63, which represents an 11.3% rise from its current price of $56.59.
TD Ameritrade’s recent 24-hour trading move, which will help clients in Asia, could also improve its valuation. In fiscal 1Q18, the company paid $119 million in cash dividends. Whereas TD Ameritrade has an LTM (last-12-month) PE ratio of 32.2x, peers (XLF) Financial Engines, Raymond James Financial, and CBOE Global Markets have LTM PE ratios of 38.9x, 22.4x, and 73.0x, respectively.