Wells Fargo’s Higher Dividend Yield Masks JPMorgan’s Superior Dividend Safety Record

Wells Fargo (NYSE:WFC | WFC Price Prediction) and JPMorgan Chase (NYSE:JPM) both raised their dividends this summer, and both report quarterly results again soon. For a retiree, what matters is which payout lasts the next downturn. Wells Fargo pays the higher yield. JPMorgan has the better record.

Wells Fargo Pays More, but Only JPMorgan Held Firm in 2020

At $80.29, Wells Fargo’s $2 forward annual dividend yields about 2.49%. JPMorgan’s $6.60 on a $326.15 share price works out to roughly 2.02%. That gap is modest. Each bank pays out about 26% of trailing earnings, so both have plenty of room.

Their stress records are where they split. Wells Fargo cut its quarterly payout from $0.51 to $0.10 in 2020, and today’s $0.50 is still below that old peak. JPMorgan held $0.90 straight through the pandemic and just raised it to $1.65.

Why Capital Ratios Decide Your Bank Dividend

A bank’s board needs regulatory room to raise the payout. Regulators tie dividends and buybacks to capital levels and annual stress tests, so for a bank, capital strength is dividend safety. Wells Fargo’s CET1 ratio, which measures core capital against risky assets, fell to 10.3% from 11.1% after a $4.0B Q1 buyback. Management still says it operates “with significant excess capital.” JPMorgan approved a new $50B repurchase program and raised its credit-loss reserves to $31.4B (+12%). Building reserves like that is a conservative move, and I see it as a good sign.

JPMorgan’s revenue moves more with markets. Equity markets revenue rose 86%, and a $4.6B Visa (NYSE:V) gain raised headline EPS. Adjusted EPS of $6.14 (+13%) gives the truer picture. Wells Fargo depends more on lending, and its net interest margin narrowed to 2.47% from 2.67%.

Wells Fargo’s Turnaround Has Momentum and Loose Ends

Regulators raised the asset cap in Q2 2025, and the Fed has since ended the 2018 order behind it (Investing.com). In total, 13 consent orders have been terminated since 2019. Growth followed: new card accounts rose nearly 60% and auto originations more than doubled. Still, office real estate nonaccruals of about $2.5B haven’t gone away. Morgan Stanley (NYSE:MS) recently argued that margin pressure is easing (Barron’s), but that is still a forecast.

What I’m Watching Before Both Banks Report

At Wells Fargo, I want to see progress toward its ~$50B net interest income guidance and a CET1 ratio that stops falling. At JPMorgan, watch whether investment banking fees, up 30%, hold up and whether the 3.33% card charge-off rate stays in check.

Why JPMorgan Is the Sturdier Income Stock

For retirement income, JPMorgan’s dividend record appears to be stronger. Wells Fargo has raised its dividend from $0.10 to $0.50 since 2021, but the 2020 cut showed how fast that check can shrink when capital gets tight. JPMorgan kept its dividend intact through a real crisis and now has more capital to spare. That record offsets the lower yield. My view changes only if Wells Fargo’s CET1 ratio steadies and its new growth holds up through a full credit cycle.

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