Key Takeaways
- Truist Financial yields 4.2% to Bank of America’s 2.7%, but Truist paid $2.08 a share in each of fiscal 2023, 2024 and 2025, while Bank of America raised its quarterly dividend 14% in July 2026.
- Bank of America paid out 28% of its normalized EPS in fiscal 2025 and 27% of fiscal 2026 consensus, against 52% and 45% for Truist.
- Both banks took one-time hits in the third quarter of 2026: a $1.2 billion regulatory charge at Bank of America and $1.4 billion of securities losses at Truist. Both boards held their dividends in October.
- At each dividend’s growth rate from fiscal 2020 to fiscal 2025, Bank of America’s income on $10,000 would pass Truist’s in about 8.5 years.
Bank of America (BAC) and Truist Financial (TFC) both took a big one-time hit in their third-quarter results last month. Both boards held their dividends anyway.
Truist pays the bigger check, a 4.2% yield against Bank of America’s 2.7%. But Bank of America’s dividend grew 8.4% a year from fiscal 2020 to fiscal 2025, about three times Truist’s 2.9% a year.
So which is the better dividend stock?
| Metric | Bank of America (BAC) | Truist Financial (TFC) |
|---|---|---|
| Dividend yield | 2.7% | 4.2% |
| Annual dividend, current rate | $1.28 | $2.08 |
| Dividend growth, fiscal 2020-2025 | 8.4% a year | 2.9% a year |
| Payout ratio of normalized EPS, fiscal 2025 | 28% | 52% |
| Payout ratio of normalized EPS, fiscal 2026 consensus | 27% | 45% |
| Price/tangible book (LTM) | 1.7x | 1.6x |
Source: TIKR and StockAnalysis, Nov. 5, 2026.
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Bank of America paid a big fine and kept its raise
Bank of America’s lending engine is growing. Net interest income rose 8% to $16.4 billion in the third quarter of 2026 compared with a year earlier.
On Oct. 13, 2026, the Treasury Department fined Bank of America more than $1.2 billion for anti-money-laundering and sanctions violations. Third-quarter diluted EPS fell to $0.91, from $1.04 in the third quarter of 2025.
The board raised the dividend 14% in July, to $0.32 a quarter, and declared the same $0.32 on Oct. 21. Coverage is wide: 28% of normalized EPS in fiscal 2025 and 27% on fiscal 2026 consensus. Nineteen analysts expect normalized EPS to rise 18% to $4.51 in fiscal 2026.
Over the last decade, the dividend per share rose every year, and the payout ratio never went above 38.5%. That peak came in fiscal 2020’s earnings dip:
CFO Alastair Borthwick spelled out the order on the third-quarter call: “We know we have to support the regulatory minimum and the dividend. And then whatever is left, we’re going to return to shareholders.” That quarter, the bank paid $2.2 billion in dividends and spent $6.0 billion on buybacks, so buybacks would give way long before the dividend did.
The main risk is capital. Its CET1 ratio slipped to 10.9% at the end of the third quarter of 2026, from 11.2% three months earlier.
Truist’s bigger check hasn’t grown since 2023
Truist took a one-time hit in the third quarter too, but it chose this one. On Oct. 14, 2026, it agreed to sell $7.7 billion of assets, its RAC dealer-related business, and repositioned its securities portfolio, realizing $1.4 billion of losses. GAAP diluted EPS fell to $0.56, just above the $0.52 quarterly dividend. Adjusted diluted EPS was $1.16, up 12% from the third quarter of 2025.
Period-end loans fell $5.9 billion from June 30, the result of the sale and a pullback from less profitable lending.
The dividend climbed from $1.15 a share in fiscal 2016 to $2.08 in fiscal 2023 and then held flat. Normalized EPS fell from $5.53 in fiscal 2021 to $3.59 in fiscal 2023:
That drop pushed the payout ratio from 33.6% to 57.9%, and it was still 52% in fiscal 2025. Twenty-one analysts expect normalized EPS to rise 15% to $4.60 in fiscal 2026, which would bring the payout down to 45%.
The main risk is that the shrinking loan book holds back earnings for longer than analysts expect.
So which dividend wins?
Bank of America is the better dividend stock. Truist pays more today. But Bank of America’s dividend is growing faster, takes about half the share of earnings that Truist’s does, and analysts expect earnings to keep climbing, from $3.81 in fiscal 2025 to $5.82 in fiscal 2028:
The faster growth adds up quickly. At 8.4% a year, $10,000 in Bank of America pays $270 now and about $560 in year 10, a 5.6% yield on your $10,000. At 2.9% a year, Truist’s $420 grows to about $545. Bank of America pulls ahead in about 8.5 years.
Truist’s dividend isn’t in danger. Adjusted EPS covered the third-quarter dividend more than twice over, and $420 a year on $10,000 is a lot more cash than $270 for anyone who needs income now. It’s just that Bank of America’s dividend has far more room to grow, and I’d rather own the payout that’s rising.
Of course, Truist plans to give a fuller picture of 2027 in January. If its overhaul starts showing up in earnings, its dividend could start growing again.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
