On January 24, 2017, Wells Fargo (WFC) announced a quarterly dividend of $0.38 for 4Q16. This dividend is payable to shareholders of record on February 3, 2017, and will be paid on March 1.
Wells Fargo is one of the highest dividend-paying stocks among its peers (XLF). In June 2016, the Federal Reserve approved Wells Fargo’s capital plans after it found that the bank could keep lending during a severe economic downturn. This approval clears the way for Wells Fargo to rewards investors through dividends and share repurchases.
Wells Fargo (WFC) reiterated its previously disclosed $0.38 dividend and didn’t provide any updates on share repurchases. On April 26, 2016, the company increased its quarterly common stock dividend to $0.38 per share from its earlier dividend of $0.375. For more on this topic, please read Did Wells Fargo Pass the Fed’s Stress Test?
Wells Fargo’s dividend payout ratio of 35.8% is slightly lower than its cap of 40%. Wells Fargo plans to pay its investors the current dividend of $0.38 per share. Its dividend yield of 3.7% is the highest among its peers. In our view, these high yields, coupled with the bank’s strong balance sheet and profitability, provide its greatest competitive advantage.
In the two-year period between 2Q14–1Q16, Wells Fargo (WFC) returned $34 billion to shareholders, outpacing its peers JPMorgan Chase (JPM), Bank of America (BAC), and Citigroup(C). Wells Fargo added 350 million shares to its share repurchase authorization in January 2016, reflecting the company’s confidence in its current valuations and its long-term prospects. For more information, please read Wells Fargo: Capital Return Outpaces Its Peers.
In 2016, Wells Fargo returned $12.5 billion to its shareholders in the form of dividends and stock repurchases.