7 Point Wells Fargo Dividend 2019 Guide (*Expert Analysis*)
Wells Fargo (NYSE: WFC) is a publicly traded company that provides financial services to individuals and organizations.
Those services fall under two segments:
- Banking – Offers checking accounts, savings accounts, credit cards, debit cards, mortgages, and small business loans.
- Wealth and Investment Management – Offers financial planning, fiduciary services, private banking, and retirement services.
As of this writing, Wells Fargo operates in more than 7,800 locations and has offices in 37 countries.
But does Wells Fargo offer a dividend that makes it an attractive income investment? Complicating the issue are various scandals that continue to bedevil the bank. Let’s get some answers.
Does Wells Fargo Pay Dividends?
Yes, Wells Fargo pays dividends.
If you’re unfamiliar with dividends, they’re distributions of company earnings to shareholders.
Dividends are typically approved by the board of directors. However, shareholders also approve dividends via voting rights.
Dividends are paid from net profits. The amount of a company’s net profits that doesn’t go towards a dividend is kept as retained earnings.
Usually, dividends are deposited directly to your brokerage account.
Some companies pay no dividends. Instead, they woo investors with the promise of increased valuation. Wells Fargo isn’t one of those companies. It offers quarterly dividends to its shareholders.
This video provides a quick explanation of exactly how dividends work.
What Is Wells Fargo’s Dividend?
The board of Wells Fargo just declared a quarterly dividend of $0.45 per share. That amounts to an annualized dividend of $1.80 per share.
The dividend is payable on March 1, 2019 to shareholders on record as of February 1, 2019.
The ex-dividend date is January 31, 2019. That means you must have owned the stock on January 30, 2019 to be eligible to receive the March 1 dividend.
What Is Wells Fargo’s Dividend History?
According to Yahoo! Finance, Wells Fargo has paid dividends since at least the early 1970s.
Back in 1972, the company only paid $0.00781 per share. Now, it’s paying $0.45 per share.
Also, the current quarterly dividend of $0.45 per share is a 4.7% increase from the previous dividend of $0.43 per share.
Clearly, the trend line shows that Wells Fargo increases its dividends over time. That’s generally considered a great sign for long-term investors.
Keep in mind, that doesn’t mean the company has always increased dividends every quarter or even every year.
In fact, during the 2008 financial crisis, Wells Fargo had to cut its dividend from $0.34 per share to just $0.05 per share. But it certainly wasn’t the only financial company to take a hit during that time.
Still, if you’re an investor who looks at dividends, the trend is your friend with Wells Fargo.
What Is Wells Fargo’s Dividend Yield?
Wells Fargo’s annual dividend yield is 3.6%.
The dividend yield is calculated by dividing the annual dividend by the share price.
The dividend yield fluctuates daily with the stock price. It’s always best to consult the latest data when evaluating a company’s dividend yield.
Following the financial crash of 2008, the Wells Fargo dividend yield dropped all the way down to 0.8%.
When Is Wells Fargo’s Dividend Payout Date(s)?
The next dividend date for Wells Fargo is March 1, 2019.
Likely dividend dates in the near future are June 3, September 2, and December 2.
That means the likely ex-dividend dates for each of those payouts is one business day prior to each of those dividend dates.
How will that affect the stock price? Investors know that they have to purchase the stock before the ex-dividend date if they want to receive the dividend.
As a result, the price of the stock is likely to increase in the days leading up to the ex-dividend date.
However, on the ex-dividend date itself, the price might fall a bit. That’s because traders are accounting for the fact that demand for the stock will drop as new investors won’t be eligible for the dividend.
In fact, there are traders who invest in stocks solely for the purpose of receiving dividends. Their interest will affect the stock price as well.
Also, companies that pay dividends consistently are popular with investors who like to buy and hold shares of stock. Since Wells Fargo has a consistent track record of paying dividends as well as raising its dividends over the long haul, you can expect it to remain attractive to long-term investors.
Will Wells Fargo’s Dividend Increase In 2019?
Since Wells Fargo has a long history of increasing its dividend, it’s likely that the company will increase its dividend yet again in 2019.
However, that’s not definite. It’s up to the board of directors.
If past history is any indication, though, you can expect Wells Fargo to grow its dividend in the months and years to come.
Will Wells Fargo’s Dividend Be Cut In 2019?
Wells Fargo could cut its dividends. If it did, it would probably be as a result of economic factors outside of the company’s control.
It’s impossible to predict the future of the economy, even in the short-term. While some people saw the financial crash of 2008 on the horizon, it’s safe to say that it caught many people off-guard. Many great companies stumbled.
Wells Fargo was clearly affected by that crash. If there’s another significant downturn, especially in the financial sector, Wells Fargo will likely cut its dividend in 2019.
In addition, Wells Fargo just settled a $240 million lawsuit with shareholders. As a result of that payout, the company will have less money for dividends.
Additionally, Wells Fargo is currently attempting to resolve issues related to its sales practices with the U.S. Justice Department and the Securities and Exchange Commission.
Late last year, the company raised the high end of potential losses related to legal problems to $2.7 billion. Again, that’s money that won’t be available for dividends. Until Wells Fargo resolves several scandals plaguing the company, the future of the stock’s dividend will remain cloudy.