TROW vs WFC: Dividend Yield, Growth & Safety Comparison
Price T Rowe Group Inc (TROW) and Wells Fargo & Company/Mn (WFC) are both in the Financials sector, making them natural rivals for dividend investors. WFC edges ahead on yield at 1.85% versus TROW's 1.31%. For dividend growth, WFC leads with a 5-year CAGR of 35.8% versus TROW's -8.7%. Both stocks carry a "Safe" dividend safety rating.
Key Metrics Comparison
| Metric | TROW | WFC |
|---|
| Dividend Yield | 1.31% | 1.85% |
| Annual Dividend | $1.27 | $1.70 |
| 5-Year CAGR | -8.7% | 35.8% |
| Payout Ratio | 55% | 27% |
| Consecutive Years | 3 | 0 |
| Price | $93.63 | $86.53 |
Yield Comparison
Wells Fargo & Company/Mn (WFC) currently yields 1.85%, which is modest for the broader market. That's 0.54% more than Price T Rowe Group Inc (TROW), which yields 1.31%. In dollar terms, WFC pays $1.70/share annually versus TROW's $1.27/share.
Dividend Growth
Over the past five years, WFC has grown its dividend at a 35.8% CAGR compared to TROW's -8.7%. 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%. 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
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. 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. WFC's payout ratio of 27% is more conservative than TROW's 55%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in WFC generates approximately $185/year in dividend income, compared to $131/year from TROW — a difference of $54/year. At $100,000, that gap widens to $540/year.
Verdict
- Best for income: WFC
- Best for growth: WFC
- Best for safety: WFC
Frequently Asked Questions
Which has a higher dividend yield, TROW or WFC?
Wells Fargo & Company/Mn (WFC) has a higher dividend yield of 1.85% compared to Price T Rowe Group Inc (TROW) at 1.31%.
Is TROW 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 Price T Rowe Group Inc's -8.7%.
Which is safer for dividend income, TROW or WFC?
Price T Rowe Group Inc's dividend safety is rated "Safe" while Wells Fargo & Company/Mn is rated "Safe." The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 7.3x. 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 TROW vs WFC generate?
A $10,000 investment in TROW generates approximately $131/year in dividends, while the same amount in WFC generates about $185/year.
Which has a lower payout ratio, TROW or WFC?
Wells Fargo & Company/Mn has a lower payout ratio of 27% compared to Price T Rowe Group Inc's 55%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
TROW vs WFC: which is better for retirement income?
It depends on your priorities. WFC for current income, WFC for dividend growth, WFC for safety. Many retirement investors hold both for diversification.
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