BAC vs TROW: Dividend Yield, Growth & Safety Comparison
Bank Of America Corp /De/ (BAC) and Price T Rowe Group Inc (TROW) are both in the Financials sector, making them natural rivals for dividend investors. BAC edges ahead on yield at 1.95% versus TROW's 1.31%. For dividend growth, BAC leads with a 5-year CAGR of 8.5% versus TROW's -8.7%. Both stocks carry a "Safe" dividend safety rating. BAC is a Dividend Contender with 12 years of consecutive increases.
Key Metrics Comparison
| Metric | BAC | TROW |
|---|
| Dividend Yield | 1.95% | 1.31% |
| Annual Dividend | $1.08 | $1.27 |
| 5-Year CAGR | 8.5% | -8.7% |
| Payout Ratio | 28% | 55% |
| Consecutive Years | 12 | 3 |
| Price | $52.38 | $93.63 |
Yield Comparison
Bank Of America Corp /De/ (BAC) currently yields 1.95%, which is modest for the broader market. That's 0.64% more than Price T Rowe Group Inc (TROW), which yields 1.31%. In dollar terms, BAC pays $1.08/share annually versus TROW's $1.27/share.
Dividend Growth
Over the past five years, BAC has grown its dividend at a 8.5% CAGR compared to TROW's -8.7%. BAC: Dividend growth has been steady, with a 3-year CAGR of 8.3% and a 5-year CAGR of 8.5% (10-year: 17.6%). TROW: Dividend growth is accelerating — the 3-year CAGR of 2.0% exceeds the 5-year rate of -8.7% and the 10-year rate of 10.0%.
Dividend Safety
BAC's dividend safety is rated "Safe." The payout ratio of 28% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.5x. TROW's dividend safety is rated "Safe." The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 7.3x. BAC's payout ratio of 28% is more conservative than TROW's 55%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in BAC generates approximately $195/year in dividend income, compared to $131/year from TROW — a difference of $64/year. At $100,000, that gap widens to $640/year.
Verdict
- Best for income: BAC
- Best for growth: BAC
- Best for safety: BAC
Frequently Asked Questions
Which has a higher dividend yield, BAC or TROW?
Bank Of America Corp /De/ (BAC) has a higher dividend yield of 1.95% compared to Price T Rowe Group Inc (TROW) at 1.31%.
Is BAC or TROW a better dividend growth stock?
Bank Of America Corp /De/ has the stronger dividend growth with a 5-year CAGR of 8.5%, compared to Price T Rowe Group Inc's -8.7%.
Which is safer for dividend income, BAC or TROW?
Bank Of America Corp /De/'s dividend safety is rated "Safe" while Price T Rowe Group Inc is rated "Safe." The payout ratio of 28% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.5x. The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 7.3x.
How much income does $10,000 in BAC vs TROW generate?
A $10,000 investment in BAC generates approximately $195/year in dividends, while the same amount in TROW generates about $131/year.
Is BAC or TROW a Dividend Aristocrat?
Bank Of America Corp /De/ is a Dividend Contender with 12 consecutive years of increases. Price T Rowe Group Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, BAC or TROW?
Bank Of America Corp /De/ has a lower payout ratio of 28% compared to Price T Rowe Group Inc's 55%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
BAC vs TROW: which is better for retirement income?
It depends on your priorities. BAC for current income, BAC for dividend growth, BAC for safety. Many retirement investors hold both for diversification.
BAC Dividend Analysis | TROW Dividend Analysis | All Comparisons | Comparison Tool