BAC vs USB: Dividend Yield, Growth & Safety Comparison
Bank Of America Corp /De/ (BAC) and Us Bancorp De (USB) are both in the Financials sector, making them natural rivals for dividend investors. USB offers a significantly higher 3.37% yield compared to BAC's 1.95%, a gap of 1.42%. For dividend growth, BAC leads with a 5-year CAGR of 8.5% versus USB's 3.8%. Both stocks carry a "Safe" dividend safety rating. Both are classified as Dividend Contenders.
Key Metrics Comparison
| Metric | BAC | USB |
|---|
| Dividend Yield | 1.95% | 3.37% |
| Annual Dividend | $1.08 | $2.04 |
| 5-Year CAGR | 8.5% | 3.8% |
| Payout Ratio | 28% | 44% |
| Consecutive Years | 12 | 15 |
| Price | $52.38 | $57.63 |
Yield Comparison
Us Bancorp De (USB) currently yields 3.37%, which is solid for the broader market. That's 1.42% more than Bank Of America Corp /De/ (BAC), which yields 1.95%. In dollar terms, USB pays $2.04/share annually versus BAC's $1.08/share.
Dividend Growth
Over the past five years, BAC has grown its dividend at a 8.5% CAGR compared to USB's 3.8%. 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%). USB: Dividend growth is slowing — the 3-year CAGR of 2.8% trails the 5-year rate of 3.8% and the 10-year rate of 7.4%.
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. USB's dividend safety is rated "Safe." The payout ratio of 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x. BAC's payout ratio of 28% is more conservative than USB's 44%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in USB generates approximately $337/year in dividend income, compared to $195/year from BAC — a difference of $142/year. At $100,000, that gap widens to $1420/year.
Verdict
- Best for income: USB
- Best for growth: BAC
- Best for safety: BAC
Frequently Asked Questions
Which has a higher dividend yield, BAC or USB?
Us Bancorp De (USB) has a higher dividend yield of 3.37% compared to Bank Of America Corp /De/ (BAC) at 1.95%.
Is BAC or USB 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 Us Bancorp De's 3.8%.
Which is safer for dividend income, BAC or USB?
Bank Of America Corp /De/'s dividend safety is rated "Safe" while Us Bancorp De 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 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x.
How much income does $10,000 in BAC vs USB generate?
A $10,000 investment in BAC generates approximately $195/year in dividends, while the same amount in USB generates about $337/year.
Is BAC or USB a Dividend Aristocrat?
Bank Of America Corp /De/ is a Dividend Contender (12 years) and Us Bancorp De is a Dividend Contender (15 years).
Which has a lower payout ratio, BAC or USB?
Bank Of America Corp /De/ has a lower payout ratio of 28% compared to Us Bancorp De's 44%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
BAC vs USB: which is better for retirement income?
It depends on your priorities. USB for current income, BAC for dividend growth, BAC for safety. Many retirement investors hold both for diversification.
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