Looking for a Great Dividend Stock? Here Are 3 Reasons Wells Fargo Fits the Bill

Here's why income-seeking investors could do a lot worse than Wells Fargo.

John Maxfield
John Maxfield
Apr 13, 2014 at 7:34AM

Among bank aficionados, Wells Fargo (NYSE:WFC) is known as one of the biggest, safest, and most shareholder-friendly banks in America. Among investors generally, it's heralded as one of the more stable and generous dividend stocks in the market.

Does this mean it's a great dividend stock for investors to buy today? In the following video, Motley Fool contributor John Maxfield explains why the answer to this is yes.

In the first case, its 2.4% yield easily outpaces the general market, measured by the S&P 500's 1.96% yield. Additionally, it distributes only 30% of its earnings to shareholders each quarter, meaning there's plenty of room left for its dividend to grow -- this is assuming, of course, the Federal Reserve allows it to do so. Finally, while Wells Fargo cut its quarterly dividend in the midst of the financial crisis, it's now in the process of rebuilding its distribution to keep pace with its massively profitable business.

As John explains, these factors arguably make Wells Fargo a worthy addition to any income-seeking investor's portfolio.