So a payout ratio of 70% would mean that for every $1 Wells Fargo earns, it pays investors $0.70. But more often than not, the dividend yield is mean reverting with share price changes.Get access to all of the retirement secrets and income strategies from our experts!Except for an unordinary spike in 2016, the trend is stable. Unlike its biggest rivals, JPMorgan Chase & Co. and Bank of America Corp., Wells Fargo doesn’t have a sizable trading operation benefiting from market volatility to soften the blow of the pandemic.Photographer: Andrew Harrer/BloombergA growing chorus of analysts and investors were already predicting Wells Fargo would have to reduce its payout this year. The chart below shows the dividend yield over the last 10 years…The company paid investors $0.49 per share a decade ago. This gives wiggle room for Wells Fargo’s board of directors to raise the dividend.Wells Fargo (NYSE: WFC) is a $219 billion business. Is Wells Fargo’s Dividend Safe? So, a payout ratio of 60% would mean that for every $1 Wells Fargo earns, it pays investors $0.60.Here is Wells Fargo’s payout ratio based on free cash flow over the last 10 years…The higher yield shows that investors have bid down the company’s market value. They adjust for goodwill and other non-cash items. The firm has offered the highest dividend yield of the largest U.S. banks in the last 12 months, and paid out $2.1 billion in dividends in the first quarter even as profit tumbled to just $653 million.Charles Scharf, chief executive officer of Wells Fargo & Co.Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.Chief Executive Officer Charlie Scharf said last month that the timing and pace of the economic recovery, as well as Wells Fargo’s ability to improve its results, will dictate the appropriate dividend level. Wells Fargo (NYSE: WFC) is a $219 billion business. So today, we’re going to review another one of the best dividend stocks around. Fortunately, Wells Fargo's strong balance sheet means the firm's dividend is likely to remain safe during a potential downturn. Let’s take a look at the yield…The company runs within the financial sector and maintains a solid credit rating (A-) from the S&P. This allows Wells Fargo to issue cheap debt to grow the business and pay dividends.Some of the world’s best investors stick to dividend portfolios. They know that a steady stream of income is a top wealth building strategy. Payout ratio calculation and chart. Let’s take a look at Wells Fargo’s dividend history and safety… Business Overview and Highlights. On Wall Street, Chris Harvey, Wells Fargo’s head of equity strategy, ... once considered solidly reliable, is not safe. ; Compares with $3.1B reserve build in Q1. Sustainability is also vital, and we’ll look at that soon.Many investors look at the payout ratio to determine dividend safety. The payout ratio is a good indicator of dividend safety… but accountants manipulate net income. Looking at Wells Fargo’s numbers, the company’s low payout ratio suggests that the dividend has been quite safe. Whether you’re new or already an experienced trader, you’ll find some unique insight. Wells Fargo & Company (WFC) Dividend Safety metrics. A better metric is free cash flow. KBW analyst Brian Kleinhanzl wrote in a separate report May 13 that “WFC’s high payout ratio is the primary driver of investor fear that a dividend cut could happen,” and cited an estimated dividend payout of 221% for 2020, compared with KBW’s estimates of a median payout ratio of 59% for universal banks covered by the firm.That points not only to loan forbearances and credit losses, but also to continued pain for countless businesses of all sizes that owe money to the banks.A recession is a time for dividend cuts, and even though most U.S. banks are in much better shape than they were at the start of the 2008 financial crisis, investors are showing no confidence in the industry.The trailing dividend payout ratio was calculated by dividing the current annual dividend rate per share by earnings per share for the past four quarters. That’s a 235% increase and you can see the annual changes below…Wells Fargo’s long history of paying dividends makes it one of the best dividend stocks around. Each year since, the big bank has started rewarding shareholders with more income.Many investors look at the payout ratio for dividend safety.

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