Is Wells Fargo A Good Dividend Stock? For retail investors and traders, it often comes as quite a surprise to see that first dividend payment come through — especially if you had no idea you’d invested in a dividend-paying company in the first place.
It’s one of the most underrated parts of investing: that extra payment (whether it be in the form of additional stock or bonus cash) that comes through as a reward for being a loyal investor. However, not all companies pay them, and not all dividend-paying companies have dividends worth waiting on. Where does Wells Fargo (WFC) fall on this spectrum?
Wells Fargo Is Almost 200 Years Old
Wells Fargo, as an institution, dates all the way back to the mid-1850s. That’s over 170 years of banking under its belt.
As one of the world’s largest banks for decades now, Wells Fargo has clearly survived the test of time (and then some).
Even after the pandemic landed a serious blow to the bank’s share price and caused a dip that started all the way back in November of 2019 and extended through to October of 2020, Wells Fargo has been publicly traded since 1978 and has recently shot back up over the past several months or so.
In other words, this bank is not going anywhere anytime soon — this makes it an objectively solid stock.
Does Wells Fargo Pay A Dividend?
The short answer is yes: Wells Fargo is one of the investment opportunities on the New York Stock Exchange that rewards its investors with a dividend.
As determined by their Board of Directors, the bank has distributed some of the bank’s earnings to its shareholders every few months for many decades now.
Retail investors and traders should expect this dividend to stick around, too — as a matter of fact, it will likely even skyrocket in the very near future. (More on that next.)
What’s The Dividend On Wells Fargo?
Just how much the dividend on Wells Fargo is depends on when exactly you’re looking at — Wells Fargo’s dividends have ranged anywhere from a few cents all the way up to nearly a couple dollars over the past few decades or so.
As of late, with Wells Fargo’s most recent dividend payment dated May 6th, 2021, the bank paid 10 cents per share.
While it might not sound like much — and is a far way off from the $1.97 dividend they were paying last May — this is actually a good sign for Wells Fargo.
Because of the Federal Reserve’s temporary restrictions placed on capital, Wells Fargo was more or less forced to cut back. However, once this restriction is lifted, shareholders can expect the bank’s dividend to jump back up by a significant margin. This could happen as soon as June of 2021, which would be reflected in the next dividend payment.
Is Wells Fargo Dividend Safe?
Despite the large dip over the past several quarters as a result of the Federal Reserve’s restriction, Wells Fargo is regarded as a safe dividend.
This is proven by the few decades of dependable payouts by the bank, and will continue to be proven by the huge increase projected to hit in the coming quarters.
How Often Are Wells Fargo Dividends Paid?
Some companies choose to do one annual payment, while others stick to the tried-and-true quarterly payment plan.
Wells Fargo pays dividends every quarter, resulting in a dividend payment every few months for loyal investors.
More specifically, Wells Fargo sends out its dividends in February, May, August, and November, with payments typically reaching shareholders’ accounts the following months in early March, June, September, and December.
Is Wells Fargo A Good Dividend Stock?
Given its long history of paying dividends and its soon-to-be enormous (expected) leap back toward the big dividends it was known for paying before the onset of the COVID-19 pandemic, Wells Fargo is a good dividend stock.
Retail investors and traders can be rest assured that there are very few dividend stocks that are projected to pay as well as Wells Fargo is expected to pay in the coming months.
Wells Fargo Scandals Loom Large
While Wells Fargo has obviously been around for quite a significant amount of time, there’s also the fact that the bank is not viewed very positively by the public due to former shady business dealings and controversies that have transpired over the past several years.
From simple bad business to serious charges of fraud, Wells Fargo has been through the ringer during the late 2010s. It isn’t the first bank to face something like this, and it certainly won’t be the last, but it’s never a good look regardless — especially when longtime Wells Fargo shareholders dumped their WFC shares to avoid losing too much on the inevitable dip.
When it rains, it pours, so it’s absolutely worth considering the fact that Wells Fargo could inevitably get caught doing more unethical business in the future. This is undoubtedly the biggest and most substantial risk to owning Wells Fargo stock.
Is Wells Fargo Stock A Buy?
Taking a look at its 170 year history and its relatively straightforward increases over the past several decades, Wells Fargo is not a stock known for being especially volatile.
While the novel coronavirus pandemic certainly took an enormous toll on its share price and on the amount of dividends paid to shareholders, Wells Fargo stock (and the investors who have given money to the bank on the New York Stock Exchange) should feel confident that things are about to take a turn for both the bank’s shares and dividends.
While you shouldn’t ignore the risks associated with Wells Fargo and its history of unethical practices recently, you should also take a look at how the bank has been working to rehabilitate its image in the wake of its scandals to better its business practices and come out of this controversy on top.
This could soon be reflected in its shares and dividends, which ultimately makes Wells Fargo stock a buy (albeit a cautious one, possibly — for those hesitant to trust Wells Fargo just yet, keep an eye on the bank’s stock. You’re not likely to regret it).
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.