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Why Wells Fargo (WFC) is a Top Dividend Stock for Your Portfolio
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Wells Fargo (WFC - Free Report) is headquartered in San Francisco, and is in the Finance sector. The stock has seen a price change of -4.24% since the start of the year. Currently paying a dividend of $0.45 per share, the company has a dividend yield of 2.02%. In comparison, the Financial - Investment Bank industry's yield is 0.92%, while the S&P 500's yield is 1.35%.
Looking at dividend growth, the company's current annualized dividend of $1.80 is up 5.9% from last year. Over the last 5 years, Wells Fargo has increased its dividend 4 times on a year-over-year basis for an average annual increase of 36.70%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Wells Fargo's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.
WFC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $7.04 per share, which represents a year-over-year growth rate of 12.10%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, WFC is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
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Why Wells Fargo (WFC) is a Top Dividend Stock for Your Portfolio
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Wells Fargo (WFC - Free Report) is headquartered in San Francisco, and is in the Finance sector. The stock has seen a price change of -4.24% since the start of the year. Currently paying a dividend of $0.45 per share, the company has a dividend yield of 2.02%. In comparison, the Financial - Investment Bank industry's yield is 0.92%, while the S&P 500's yield is 1.35%.
Looking at dividend growth, the company's current annualized dividend of $1.80 is up 5.9% from last year. Over the last 5 years, Wells Fargo has increased its dividend 4 times on a year-over-year basis for an average annual increase of 36.70%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Wells Fargo's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.
WFC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $7.04 per share, which represents a year-over-year growth rate of 12.10%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, WFC is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).