Wells Fargo (NYSE:WFC) is a selection for the real-money Inflation-Protected Income Growth portfolio. In this brief video, portfolio manager Chuck Saletta offers three reasons he's holding on to the megabank's stock despite its 20% increase since he bought the shares in May 2013. Chuck also compares Wells Fargo's progress since the financial crisis to Bank of America (NYSE:BAC) and Citigroup (NYSE:C) to showcase what makes Wells Fargo such a rock-solid bank.


  • Wells Fargo's dividend has increased to $0.35 per share -- beyond where it was at the start of the financial crisis -- and is still well covered, with room to continue growing. Contrast that with Bank of America and Citigroup, whose dividends are still at the $0.01 per share they fell to during the crisis.
  • Wells Fargo was able to increase its dividend faster than Bank of America and Citigroup because Wells Fargo has a solid balance sheet and a strong capital structure. As a result, Wells Fargo received Federal Reserve permission to restore its dividend far faster than those other megabanks.
  • Wells Fargo still looks reasonably priced, with a market cap in line with the iPIG portfolio's fair-value estimate.

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Chuck Saletta owns shares of Wells Fargo and has an open options position in Bank of America. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, and Wells Fargo and has the following options: short June 2014 $50 calls on Wells Fargo and short June 2014 $48 puts on Wells Fargo.

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