U.S. Bancorp Pays Out 40% of Its Profit as Dividends. Here's How Much Room It Has to Raise Them.
Key PointsThere are three major metrics to gauge a dividend stock.
U.S. Bancorp recently paid out 40% of its profit as dividends, leaving ample room for further increases. The bank, which manages $703 billion in assets through its subsidiary U.S. Bank, has been raising its dividend for 16 consecutive years. Currently, it offers a solid yield of 3.54%, which is among the highest in the industry, only surpassed by a few competitors like JPMorgan Chase and PNC Financial.
U.S. Bancorp's high yield is not due to a declining share price but rather robust earnings. With a payout ratio of 40%, the bank is returning a healthy portion of its earnings to shareholders without appearing overly stretched. Analysts believe this ratio falls within a sustainable range, allowing U.S. Bancorp to continue raising its dividend.
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