Hi, I'm Jimmy in this video, I'm going to walk through my top five dividend stocks from
the financial sector.
This video is part of our passive income from dividend series where our goal is to find
the top dividend stocks from each of the 11 sectors that can ultimately give us the passive
income that we need to get closer to our goal of financial independence.
There's a link in the description below.
To all of the other sector videos.
OK, so to make this top dividend stocks list, we created a few basic rules.
First, they must have a current dividend yield above 2 percent.
Then they need a decent different dividend coverage ratio and ideally they should be
able to grow their dividend.
Now, if you happen to know any other great dividend stocks from the financial sector,
well, please let me know in the comments below.
There's lots of them in this sector.
So any ideas you have beyond the five that I mentioned, please comments below.
Now, most of the companies on this list actually traded a few different countries.
So you're likely to be able to find the dividend stocks that you're after wherever you live.
If you look around a bed for whatever countries you might access, you might have access to
trading.
OK, so let's jump into our first dividend stock.
First up, JP Morgan ticker symbol JPM.
JP Morgan has a current dividend yield of by two point six percent.
When we pull up their dividends per share chart, well, we can see that they've been
quite steadily growing their dividends in recent years.
And when we add earnings per share to this mix, well, we can see that J.P. Morgan has
done a good job of covering their dividends in past years.
And if we believe analyst analyst estimates of the green bars, well, it looks like they're
expecting for that to continue for at least the next few years.
Okay, great.
So I'm going to blow through some of these companies fairly quickly because I'm trying
to get five companies in and I don't wanna make the video too much longer a waste everybody's
time.
So if there's any of these companies that you think I should do a deeper dove on, I
recognize I'm going through these fairly quickly.
Any companies I should do a deeper dove.
Please put it in the comments below.
Okay.
Next up, we have Morgan Stanley ticker symbol MS Morgan Stanley is the current dividend
yield of about two point seventy five percent.
And when we look at their dividend history, well, we can see that their dividend history
has been growing nicely since about 2014.
And it seems that analysts are expecting for that growth to continue over the next couple
of years.
Now, when we add earnings per share to this mix, what we can see that they look like they're
going to be able to continue to afford their dividends, which is a good thing for the sustainability
of those dividends.
Okay.
Moving along.
Next up, we have Prudential ticker symbol PRU, and that's the ticker, I believe in both
the US and in London.
Now, Prudential is a dividend yield of a bit over 4 percent.
And when we look at their earnings per share and their dividend chart, what we can see
that they've grown their dividend nicely in the past few years and there's so much excess
earnings per share that it seems like their dividend is more than safe.
Right.
So unless something crazy happens, I expect their dividend to at least be maintained and
probably increased over the next couple of years.
Okay.
Next up, we have Citigroup ticker symbol C. Right now, Citigroup has a dividend yield
of about two and a half percent.
And this is a chart of Citigroup's dividends and earnings per share going back the past
few years.
And although they didn't start picking up the growth of their dividend until about 2015,
I know it looks like they actually didn't have a dividend before that.
They did.
It was one penny per quarter or four cents on an annual basis.
That's why you see just a little dot there.
Then they started picking up the growth of those dividend since then.
And we can see with the profits that they can more than cover their dividend.
So I wouldn't be surprised if their dividend continues to climb in the next few years.
Okay.
Next up, we have one of the more interesting, probably opportunistic and definitely controversial
companies on the list.
Wells Fargo ticker symbol WFC.
Right now, they have dividend yield of a bit more than 3 percent.
And the real opportunity behind Wells Fargo came out of their fake account scandal from
2016.
This is a chart of Wells Fargo's dividend and adjusted earnings per share going back
the past few years.
And as we could see, their dividends look like they're starting to pick up pace again.
And luckily, there's more than enough earnings per share to handle the volatility in profits
over the past couple of years.
Now, we may notice that down here there's a dip in profits back in 2017, and this is
at least partially from the aftermath of the fake account scandal.
So for anyone unaware of what happened about three years ago, it came out that Wells Fargo
was trading.
I believe it was something like three and a half million fake credit card and bank accounts
for customers without the customers knowing about it.
Clearly, these are criminal actions.
So the CEO ends up out of his job and some it's like five thousand fifty three hundred.
Some auto employees are also out of a job.
Meanwhile, the Federal Reserve stepped in and put an asset cap of two trillion dollars
on the company until the company had better oversight and better to make it less likely
that this would happen again.
They like, oh, the CEO brought another CEO like, oh, that CEO.
So the third CEO is in people.
Many investors are saying that they're optimistic about the new CEO, who's Charlie Scharf, who
he used to be the CEO of Visa.
So the theory is that Charlie Scharf will be able to get the company back on course
again.
They can cut expenses and they've already up their dividend once.
So many analysts are expecting for that continued increase in their dividend per share to happen
at a faster rate than it was for a few years before that.
Plus, there is an assumption that the customers who are going to leave Wells Fargo when the
whole scandal happened.
Well, they probably already left.
So perhaps the increase in dividends and the additional stock buybacks are enough to get
investors back to the table, which should make their stock grow again, which hasn't
grown in the past few years.
Just to illustrate the stock buybacks that they've really increased recently.
Well, this is a chart of Wells Fargo's diluted shares outstanding going back to 2012.
And we can see that they went from four point a billion shares in 2018 to just short of
four point four billion shares in 20 19.
Now, I zoomed in here on this chart just so we could see the fact that they made bigger
share buybacks in the most recent year.
So please don't think that the shares outstanding got cut in half here.
I just zoomed in so we could see it better.
Now, I know that some investors don't like stock buybacks and there's certainly a case
to be made against them, but they're not all bad.
In fact, I did a video on stock buybacks where I go through some of the pros and cons of
stock buybacks in a bit more detail.
That could be a good next video for you to watch.
If you're curious about it, there's a link here and there's a link in the description
below.
So I hope you found these companies interesting.
I want to thank you for stick with me all the way into the video.
I really do appreciate it.
Thanks.
And hopefully I hear from you over the buyback video.
Thanks.
I'll see in the next video.