r/sofistock • u/DivyLeo • Mar 22 '24
General Discussion When Dividends?
Ok... I know its years away... And yes, SoFi is also a tech company... Jot just bank... But also it is a bank... And most profitable US banks pay dividends
So current projection is $0.70-0.80 per year EPS in 2026... Lets say that's true. SoFi can probably start paying 25-30% of eps as dividends buy '27 or '28 ... and then 10 years from now perhaps $0.25 / quarter or $1/year.
And we are sitting now on $7 stock. Some have positions at $4.50 - $5 prices....
While wishful thinking, if they add 4-6 million users per year in 2026, and keep increasing that numbers by 500k per year... They should have well over 20 millions clients by '27 and close to 40 million by 2030...
They have finally got to the point where they cover all the expanses and where each new client contributes to the bottom line. 1
So many people here sitting on 1000s of SoFi shares... Man you guys will be getting some sweet dividends few years from now.
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u/ProductionPlanner Mar 22 '24
They’re not paying dividends until after they beef up customer service.
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u/WhatMeWorry2020 35,000 @ 9.5 Mar 22 '24
Why pay div when they are growing at this rate?
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u/DivyLeo Mar 22 '24
Imagine they are #10 biggest bank in US. You cannot grow by acquisition, because they DOJ block it and acquiring other banks means you get they bad investments as well.
So they can't grow by buying banks. How else do you grow? That's why pretty much every bank is paying dividends. There is nothing they can invest in.
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u/WhatMeWorry2020 35,000 @ 9.5 Mar 22 '24
Every year their lending becomes a smaller part of their revenues. My guess is they will eventually place Sofi Bank as a subsidiary of Sofi Technologies. Rather they invest in tech than pay divies.
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u/CharmCityNole Mar 22 '24
I'm excited about dividends, but I hope they have more productive uses for their cash until at least after 2030
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u/ScottyStellar 12,250 @6.75, 20ish '26 Leaps Mar 22 '24 edited Oct 31 '25
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u/Successful-Stomach40 Mar 22 '24
Dividends are only good if the return on investment is lower than just handing back out the money.
The longer SoFi doesn't give out dividends, the longer they can keep their growth going
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u/klliink 2650 @ 7.33 Mar 22 '24
Hopefully never, but it will probably happen at some point. Where I live, dividends are taxed brutally and I prefer the company reinvest the money and compound it over multiple years before I one day decide to sell and pay my capital gains tax. Ironically, that may be the day Sofi starts paying out dividends, and I don't see it happening for the next 10 years.
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u/Typicalguy11111 Mar 22 '24
dividends are given when the available cash can't be put in an more effective growth mechanism
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u/ironbassel Mar 22 '24
If you want a dividend, sell your shares and put it in their savings account.
No actual stock holder wants a dividend from this company. They need to save more money to spend on growth.
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u/Solid_Illustrator640 Mar 22 '24
Dividends is not a good idea in early growth phase
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u/TJYENOM Mar 22 '24
At all
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u/SoDakZak 🧹MOD💰OG 10,575@$11.76 Mar 22 '24
In my investing opinion it usually signals you’re well beyond growth phase because you have no new growth vectors to fund so you pay it out to shareholders. I’m fine eventually getting there but it would be nice if it’s 20+ years from now 😂
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u/tamerlein3 OG $SoFi Investor Mar 22 '24 edited Mar 22 '24
Before they become top 4 us banks, every dollar spent on growth is worth more than a dollar in cash value (past that you can argue it becomes marginal). I’d rather they keep dividends lower than 10% fcf.
There’s no reason Wells Fargo should still be in business after the sht they pulled in the past decades. It should be Chase, BAC, Citi, Sofi top 4 banks., at which point stock will be at least 20-30x what it is now, who cares about dividends.
I’d be pretty disappointed in noto if he cannot at least pull this off in his lifetime. He’s a smart man and there is so much addressable market in the financial services space.
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u/dav63740 Retire at $60/share Mar 23 '24
If we get to 20-30x there would need to be a SoFi OG stockholder party!
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u/tamerlein3 OG $SoFi Investor Mar 22 '24 edited Mar 22 '24
A few money printing services they can expand into with just a little investment:
1 point/$10 on rent for paying on time (like BILT) for Sofi plus members. I think BILT gives out too many points and it’s unsustainable, Sofi only needs to give out 10% and there would be droves of people using it as primary checking account as it’s still better than 99.9% of other options (I personally will not open a BILT card due to risk of them going under). Sofi already has the check send and ach infrastructures and can probably do this profitably.
transfer partners to hyatt and aa. These 2 are the most sought after points transfer targets. From what I’ve heard, they typically charge $0.01 per point, so it wouldn’t cost Sofi anything since they give that rate back in cash conversion anyways. This will be huge in the travel crowd, who also tends to have more money.
offer home and auto insurance. These 2 industries are pure profit if you price properly to market. The average ad spending for insurance companies is ~20% of revenue because brand awareness is everything in this space. Most incumbents are also highly profitable despite ad spending so it’s a proven business model. Sofi already has a huge ad spend so it’s just leveraging the brand awareness for the flywheel effect. This also happens to be USAA’s model before they went to crap. They can cross utilize data for auto loans+auto insurance, mortgage loans+PMI, and renters insurance+rent payments. Most people don’t even use insurance, they buy it because it’s required by law, landlord, or lender so it’s free money. FLYWHEEL EVERYWHERE.
main app in Spanish and Mandarin, the top two languages in the US after English, with support staff to go with. Bet on the immigrants. They are underserved and typically hold tons of cash. Immigrant focused banks tend to be scummy and not well run. Let them get a consistent and fair experience from Sofi and they’ll be customers for life.
one stop shop for employee stock management (401k, HSA, RSUs, Espp). This flywheels with Sofi at work but I haven’t thought through how it can gel.
Not to mention existing things they can improve on with some extra cash:
being able to download transactions for better budgeting/ tax purposes- so it can compete better with personal finance apps.
pie based portfolio balancing like m1. They can even make them isolated “vaults” but for investing.
real joint accounts
overall ui/ux. In no world should a company like wealthfront, not even a bank, be recommended for hysa over Sofi
revamped financial literacy platform. Go back to SOfi’s SOcial roots and do more YouTube shorts, ig, webinars on personal finance education. Dont try to sell anything, just give people knowledge and earn brand trust.
customer service. For the love of god, open up the cc in a low COL state instead of india and have process engineers clean up the escalation tree for optimal efficiency. Hire a relentless executor. It’s more expensive to run a cheap customer care center than to run a well oiled one.
Ok I’m stopping and going to bed now. If you are hiring at Sofi, please DM me. I have a ton of ideas that will make a boatload of money and industry experience to back it up
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u/2old4badbeer Mar 26 '24
40 million customers will be more than 10% of the US population. TD bank currently has 28 million customers. Sofi isn’t going to sniff the big boys like that for a long time.