Top 5 Financial Dividend Stocks – Dividends for Passive Income

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.

49 thoughts on “Top 5 Financial Dividend Stocks – Dividends for Passive Income

  1. I'd say Goldman Sachs is an honorable mention. They currently have a dividend yield of 2.17%, 16.53% payout ratio and a Forward PE of 9.60. Great video as always!

  2. Thanks.. I'd include consecutive years of increasing dividends as another integral key check when analyzing investment options.

  3. Canadian banks. Heavily regulated, safe, rank best in the world. Close to 4% yields and been paying dividends over 100+ years ! Long TD

  4. Jimmy great video and content. I am curious as to why you didn't select PBCT, BEN or the other dividend aristocrats. PBCT has a high yield and low PE ratio and is one of the top holdings in NOBL. Thanks again for all your advice.

  5. Too many banks. I'd expect to see BlackRock and some European picks (Allianz, Axa) included in the mix.
    Also, i do not prefer stocks in which Buffett is too heavily involved (BAC here, OXY for Energy sector).

  6. Love your videos. Great videos I learned a lot from these.
    Question : where you get dividends vs adjusted ESP chats from ?

  7. I love how your videos provide not only useful info, but very profitable! You actually give value to your viewers! And for that I subscribed. 🙂
    One question, if I buy the same stock but the London one instead of the USA, one, will I earn the same dividend? I'm on Spain (and trying to not pay twice the taxes for the dividends…).

  8. Just a little counter argument. Dividend investing is fixed income investing. Thus you should not bet on rising dividends but mostly consider what the yield is today. Thus, accepting stocks under 5% means a return over more than 20 years. In such a long time, too much can happen.

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