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Three Dividend-Paying Stocks to Buy on the Dip

WFC Dividend Yield Chart WFC Dividend Yield data by YCharts

Wells Fargo

Background: Wells Fargo is a diversified financial services company providing banking, insurance, investments, mortgage and consumer finance services through stores, its Internet site and other distribution channels across North America as well as internationally.

Price To Book: 1.5

Earnings Payout Percentage: 26%

Wells Fargo was one of the few banks that didn't require the government to save it from poor loan decisions. US Bancorp (USB) is another large bank for which I have respect and it is on my buy list.

Wells Fargo is also the second stock to make both lists again. GE was the first and Wells Fargo is a strong second. The dividend payout percentage is uncommonly attractive, and if any stock is going to continue raising the dividend amount, you can bet this bank is in the running. The board of directors recently raised the amount and paid 30 cents. That's almost back to the start of 2009 amount of 34 cents.

After cutting the dividend from 34 cents down to 5 cents, Wells Fargo has come a long way. Short-sellers are not interested in betting against this one. Short interest is a non-factor at a rate of 0.9% of the float.

Keep the powder dry and look for a retracement near $39 as a lower-risk entry level.

WFC Payout Ratio TTM Chart WFC Payout Ratio TTM data by YCharts

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