TROW vs USB: Dividend Comparison
Dividend data as of
Price T Rowe Group Inc (TROW) 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 TROW's 1.31%, a gap of 2.05%. For dividend growth, USB leads with a 5-year CAGR of 3.8% versus TROW's -8.7%. Both stocks carry a "Safe" dividend safety rating. USB is a Dividend Contender with 15 years of consecutive increases.
Verdict
Yield Analysis
USB yields 2.05% more than TROW. In dollar terms, TROW pays $1.27/share vs USB's $2.04/share annually.
Dividend Growth
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%.
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
TROW: The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 7.3x.
USB: The payout ratio of 44% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.3x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in TROW vs USB today?
At $93.63 per share, $10,000 buys about 106.8 shares of Price T Rowe Group Inc (TROW). Each share pays $1.27 per year in dividends, so the position starts out generating roughly $136 per year — about $11 a month.
At $57.63 per share, $10,000 buys about 173.5 shares of Us Bancorp De (USB). Each share pays $2.04 per year in dividends, so the position starts out generating roughly $354 per year — about $30 a month.
USB is the larger income stream from day one: $218 per year more on the same $10,000 invested.
What could $10,000 of TROW or USB income look like in 10 years?
Price T Rowe Group Inc (TROW)'s dividend has shrunk about 8.7% a year over the past five years. If that trend continued, today's $131 per year on $10,000 (at the current 1.31% yield) would fall to $53 per year by 2036.
Us Bancorp De (USB) has raised its dividend about 3.8% a year over the past five years. If that pace held, the $337 per year that $10,000 generates today at the current 3.37% yield would reach $487 per year by 2036 — a 4.9% yield on the original cost.
On those trailing rates, USB pays more in 2036: $487 versus $53 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would TROW's dividend growth overtake USB's higher yield?
It doesn't, on the trailing numbers. Us Bancorp De (USB) yields more today (3.37% vs 1.31%) and has also grown its dividend at least as fast (3.8% vs -8.7% a year over five years). Unless TROW accelerates its raises or USB stumbles, TROW never closes the income gap — USB wins on both current income and growth.
Can TROW and USB afford their dividends?
Price T Rowe Group Inc (TROW) earns $9.24 per share against $1.27 paid out in dividends — 7.3x coverage (a 55% payout ratio).
Us Bancorp De (USB) earns $4.62 per share against $2.04 paid out in dividends — 2.3x coverage (a 44% payout ratio).
TROW's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for USB if earnings weaken.
Which fits an early-retirement income portfolio better, TROW or USB?
For income you need right now, Us Bancorp De (USB) leads: $100,000 invested today pays about $281 a month at the current 3.37% yield, versus $110 a month from Price T Rowe Group Inc (TROW) at 1.31%.
USB also leads on dividend growth (3.8% vs -8.7% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: TROW has raised its dividend 3 consecutive years; USB has raised its dividend 15 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $60/yr in TROW vs $679/yr in USB by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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