From 24/7 Wall St. · Chris Lange · · 2m
Big Banks Pay Similar Dividends, Balance Sheets Reveal Safety Gap
Four major U.S. banks raised dividends recently with yields near 2.3%, but their balance sheets show a safety gap separating fortress payers from recent cutters.
In brief
Four major U.S. banks raised dividends recently with yields near 2.3%, but their balance sheets show a safety gap separating fortress payers from recent cutters. JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America all raised dividends recently with yields within 0.1% of each other, but their balance sheets…
Big Banks Raise Dividends
America's four biggest banks all raised their quarterly payouts within the past six months: JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America.
Yields Within 0.1% Range
The group's best yield is only 2.3%, with all four banks having yields within a razor-thin range.
JPMorgan Chase: Fortress Payer
JPMorgan yields 1.83% at a share price near $333 with the strongest safety numbers among the four banks.
JPMorgan's Safety Metrics
The board raised the quarterly dividend to $1.65 from $1.50, with a trailing payout ratio of 25.8% and a standardized CET1 ratio of 13.9%.
JPMorgan's Track Record
JPMorgan cut its quarterly payout from $0.38 to $0.05 in 2009 but held the dividend at $0.90 per quarter in 2020.
Citigroup: Lowest Payout Ratio
Citigroup yields 2.03% at about $122.61 with a trailing payout ratio near 24.1% and a CET1 ratio of 12.8%.
Citigroup's Safety Metrics
Citigroup has more than $1 trillion of available liquidity and a CET1 ratio margin of 120 basis points above the regulatory floor.
Citigroup's Track Record
Citigroup cut its quarterly payout to $0.01 in 2009 and held it at $0.51 during the pandemic before raising it four times.
Wells Fargo: Most Recent Cut
Wells Fargo cut its quarterly payout from $0.51 to $0.10 in 2020 and has raised it every year since 2022.
Bank of America: Highest Yield
Bank of America offers the group's top yield at 2.3% with shares near $50.45 and a trailing payout ratio of 27.6%.
Ranking the Four Banks
JPMorgan ranks first with the strongest safety metrics, Citigroup ranks second on the lowest payout ratio, and Wells Fargo comes last due to its 2020 cut.
The takeaway
JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America all raised dividends recently with yields within 0.1% of each other, but their balance sheets reveal a safety gap that separates a fortress payer from a bank that cut its payout as recently as 2020.
