Wells Fargo(WFC) ZACKS·2025-01-16 17:46Dividends and Income Investing - Income investors focus on generating consistent cash flow from liquid investments, which can come from bond interest, other interest-bearing investments, and dividends [1][2] - Dividends are distributions of a company's earnings to shareholders, often measured by dividend yield, which is the dividend as a percentage of the current stock price [2] - Academic studies show dividends contribute significantly to long-term returns, often exceeding one-third of total returns [2] Wells Fargo Overview - Wells Fargo (WFC) is in the Finance sector, with shares seeing a price change of 8.13% year-to-date [3] - The company currently pays a dividend of 1.60 is up 6.7% from last year [4] - Over the last 5 years, the company has increased its dividend 4 times on a year-over-year basis, with an average annual increase of 18.69% [4] - Future dividend growth depends on earnings growth and payout ratio, with Wells Fargo's current payout ratio at 30% [4] - The Zacks Consensus Estimate for 2025 earnings is $5.57 per share, representing a year-over-year growth rate of 3.72% [5] Dividend Investment Considerations - High-growth firms or tech start-ups rarely provide dividends, while larger, more established companies with secure profits are often the best dividend options [7] - During periods of rising interest rates, high-yielding stocks tend to struggle, but Wells Fargo remains an attractive dividend play with a Zacks Rank of 2 (Buy) [7]