BAC vs WFC: Dividend Yield, Growth & Safety Comparison
Bank Of America Corp /De/ (BAC) and Wells Fargo & Company/Mn (WFC) are both in the Financials sector, making them natural rivals for dividend investors. Both stocks offer similar yields — BAC at 1.95% and WFC at 1.85%. For dividend growth, WFC leads with a 5-year CAGR of 35.8% versus BAC's 8.5%. Both stocks carry a "Safe" dividend safety rating. BAC is a Dividend Contender with 12 years of consecutive increases.
Key Metrics Comparison
| Metric | BAC | WFC |
|---|
| Dividend Yield | 1.95% | 1.85% |
| Annual Dividend | $1.08 | $1.70 |
| 5-Year CAGR | 8.5% | 35.8% |
| Payout Ratio | 28% | 27% |
| Consecutive Years | 12 | 0 |
| Price | $52.38 | $86.53 |
Yield Comparison
Bank Of America Corp /De/ (BAC) currently yields 1.95%, which is modest for the broader market. That's 0.10% more than Wells Fargo & Company/Mn (WFC), which yields 1.85%. In dollar terms, BAC pays $1.08/share annually versus WFC's $1.70/share.
Dividend Growth
Over the past five years, WFC has grown its dividend at a 35.8% CAGR compared to BAC's 8.5%. 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%). WFC: Dividend growth is slowing — the 3-year CAGR of 30.4% trails the 5-year rate of 35.8% and the 10-year rate of 4.5%.
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. WFC's dividend safety is rated "Safe." The payout ratio of 27% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.7x. Both have similar payout ratios — BAC at 28% and WFC at 27%.
Income Comparison
A $10,000 investment in BAC generates approximately $195/year in dividend income, compared to $185/year from WFC — a difference of $10/year. At $100,000, that gap widens to $100/year.
Verdict
- Best for income: BAC
- Best for growth: WFC
Frequently Asked Questions
Which has a higher dividend yield, BAC or WFC?
Bank Of America Corp /De/ (BAC) has a higher dividend yield of 1.95% compared to Wells Fargo & Company/Mn (WFC) at 1.85%.
Is BAC or WFC a better dividend growth stock?
Wells Fargo & Company/Mn has the stronger dividend growth with a 5-year CAGR of 35.8%, compared to Bank Of America Corp /De/'s 8.5%.
Which is safer for dividend income, BAC or WFC?
Bank Of America Corp /De/'s dividend safety is rated "Safe" while Wells Fargo & Company/Mn 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 27% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.7x.
How much income does $10,000 in BAC vs WFC generate?
A $10,000 investment in BAC generates approximately $195/year in dividends, while the same amount in WFC generates about $185/year.
Is BAC or WFC a Dividend Aristocrat?
Bank Of America Corp /De/ is a Dividend Contender with 12 consecutive years of increases. Wells Fargo & Company/Mn does not currently qualify for aristocrat status.
Which has a lower payout ratio, BAC or WFC?
Wells Fargo & Company/Mn has a lower payout ratio of 27% compared to Bank Of America Corp /De/'s 28%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
BAC vs WFC: which is better for retirement income?
It depends on your priorities. BAC for current income, WFC for dividend growth. Many retirement investors hold both for diversification.
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