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Top 5 Financial Dividend Stocks - Dividends for Passive Income - YouTube
Channel: Learn to Invest - Investors Grow
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Hi, I'm Jimmy in this video, I'm going to
walk through my top five dividend stocks from
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the financial sector.
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This video is part of our passive income from
dividend series where our goal is to find
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the top dividend stocks from each of the 11
sectors that can ultimately give us the passive
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income that we need to get closer to our goal
of financial independence.
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There's a link in the description below.
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To all of the other sector videos.
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OK, so to make this top dividend stocks list,
we created a few basic rules.
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First, they must have a current dividend yield
above 2 percent.
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Then they need a decent different dividend
coverage ratio and ideally they should be
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able to grow their dividend.
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Now, if you happen to know any other great
dividend stocks from the financial sector,
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well, please let me know in the comments below.
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There's lots of them in this sector.
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So any ideas you have beyond the five that
I mentioned, please comments below.
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Now, most of the companies on this list actually
traded a few different countries.
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So you're likely to be able to find the dividend
stocks that you're after wherever you live.
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If you look around a bed for whatever countries
you might access, you might have access to
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trading.
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OK, so let's jump into our first dividend
stock.
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First up, JP Morgan ticker symbol JPM.
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JP Morgan has a current dividend yield of
by two point six percent.
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When we pull up their dividends per share
chart, well, we can see that they've been
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quite steadily growing their dividends in
recent years.
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And when we add earnings per share to this
mix, well, we can see that J.P. Morgan has
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done a good job of covering their dividends
in past years.
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And if we believe analyst analyst estimates
of the green bars, well, it looks like they're
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expecting for that to continue for at least
the next few years.
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Okay, great.
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So I'm going to blow through some of these
companies fairly quickly because I'm trying
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to get five companies in and I don't wanna
make the video too much longer a waste everybody's
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time.
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So if there's any of these companies that
you think I should do a deeper dove on, I
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recognize I'm going through these fairly quickly.
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Any companies I should do a deeper dove.
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Please put it in the comments below.
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Okay.
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Next up, we have Morgan Stanley ticker symbol
MS Morgan Stanley is the current dividend
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yield of about two point seventy five percent.
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And when we look at their dividend history,
well, we can see that their dividend history
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has been growing nicely since about 2014.
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And it seems that analysts are expecting for
that growth to continue over the next couple
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of years.
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Now, when we add earnings per share to this
mix, what we can see that they look like they're
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going to be able to continue to afford their
dividends, which is a good thing for the sustainability
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of those dividends.
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Okay.
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Moving along.
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Next up, we have Prudential ticker symbol
PRU, and that's the ticker, I believe in both
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the US and in London.
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Now, Prudential is a dividend yield of a bit
over 4 percent.
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And when we look at their earnings per share
and their dividend chart, what we can see
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that they've grown their dividend nicely in
the past few years and there's so much excess
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earnings per share that it seems like their
dividend is more than safe.
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Right.
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So unless something crazy happens, I expect
their dividend to at least be maintained and
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probably increased over the next couple of
years.
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Okay.
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Next up, we have Citigroup ticker symbol C.
Right now, Citigroup has a dividend yield
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of about two and a half percent.
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And this is a chart of Citigroup's dividends
and earnings per share going back the past
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few years.
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And although they didn't start picking up
the growth of their dividend until about 2015,
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I know it looks like they actually didn't
have a dividend before that.
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They did.
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It was one penny per quarter or four cents
on an annual basis.
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That's why you see just a little dot there.
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Then they started picking up the growth of
those dividend since then.
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And we can see with the profits that they
can more than cover their dividend.
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So I wouldn't be surprised if their dividend
continues to climb in the next few years.
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Okay.
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Next up, we have one of the more interesting,
probably opportunistic and definitely controversial
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companies on the list.
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Wells Fargo ticker symbol WFC.
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Right now, they have dividend yield of a bit
more than 3 percent.
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And the real opportunity behind Wells Fargo
came out of their fake account scandal from
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2016.
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This is a chart of Wells Fargo's dividend
and adjusted earnings per share going back
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the past few years.
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And as we could see, their dividends look
like they're starting to pick up pace again.
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And luckily, there's more than enough earnings
per share to handle the volatility in profits
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over the past couple of years.
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Now, we may notice that down here there's
a dip in profits back in 2017, and this is
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at least partially from the aftermath of the
fake account scandal.
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So for anyone unaware of what happened about
three years ago, it came out that Wells Fargo
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was trading.
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I believe it was something like three and
a half million fake credit card and bank accounts
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for customers without the customers knowing
about it.
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Clearly, these are criminal actions.
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So the CEO ends up out of his job and some
it's like five thousand fifty three hundred.
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Some auto employees are also out of a job.
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Meanwhile, the Federal Reserve stepped in
and put an asset cap of two trillion dollars
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on the company until the company had better
oversight and better to make it less likely
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that this would happen again.
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They like, oh, the CEO brought another CEO
like, oh, that CEO.
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So the third CEO is in people.
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Many investors are saying that they're optimistic
about the new CEO, who's Charlie Scharf, who
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he used to be the CEO of Visa.
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So the theory is that Charlie Scharf will
be able to get the company back on course
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again.
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They can cut expenses and they've already
up their dividend once.
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So many analysts are expecting for that continued
increase in their dividend per share to happen
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at a faster rate than it was for a few years
before that.
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Plus, there is an assumption that the customers
who are going to leave Wells Fargo when the
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whole scandal happened.
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Well, they probably already left.
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So perhaps the increase in dividends and the
additional stock buybacks are enough to get
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investors back to the table, which should
make their stock grow again, which hasn't
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grown in the past few years.
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Just to illustrate the stock buybacks that
they've really increased recently.
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Well, this is a chart of Wells Fargo's diluted
shares outstanding going back to 2012.
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And we can see that they went from four point
a billion shares in 2018 to just short of
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four point four billion shares in 20 19.
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Now, I zoomed in here on this chart just so
we could see the fact that they made bigger
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share buybacks in the most recent year.
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So please don't think that the shares outstanding
got cut in half here.
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I just zoomed in so we could see it better.
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Now, I know that some investors don't like
stock buybacks and there's certainly a case
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to be made against them, but they're not all
bad.
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In fact, I did a video on stock buybacks where
I go through some of the pros and cons of
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stock buybacks in a bit more detail.
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That could be a good next video for you to
watch.
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If you're curious about it, there's a link
here and there's a link in the description
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below.
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So I hope you found these companies interesting.
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I want to thank you for stick with me all
the way into the video.
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I really do appreciate it.
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Thanks.
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And hopefully I hear from you over the buyback
video.
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Thanks.
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I'll see in the next video.
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