Key Takeaways
- U.S. Bancorp raised its quarterly dividend 3.8% to $0.54 a share in June, while Truist’s dividend has held at $2.08 a year since 2023.
- Truist yields 4.5%, against 3.8% for U.S. Bancorp.
- U.S. Bancorp paid out 44% of its normalized EPS in fiscal 2025, and Truist paid out 52%, with analysts expecting 40% and 44% in 2026.
- At their five-year growth rates, U.S. Bancorp’s dividend income would pass Truist’s around 2044.
In June, U.S. Bancorp (USB) announced a 3.8% raise to its quarterly dividend, from $0.52 to $0.54 a share. A month later, it reported record revenue.
Truist Financial (TFC) had a strong July too, with earnings per share up 37% from a year earlier. Yet where U.S. Bancorp keeps raising, Truist has held its dividend at $2.08 a share for a year since 2023 and put its extra capital into buybacks.
So for income investors, the choice is Truist’s 4.5% yield or U.S. Bancorp’s 3.8% yield with a growing dividend. Which is the better dividend stock?
| Metric | U.S. Bancorp (USB) | Truist Financial (TFC) |
|---|---|---|
| Dividend yield | 3.8% | 4.5% |
| Annual dividend, current rate | $2.16 | $2.08 |
| Dividend growth, 5 years | 4.0% a year | 2.9% a year |
| Dividend growth, 10 years | 7.3% a year | 7.1% a year |
| Fiscal years of higher dividends per share, in a row | 15 | 0 |
| Payout ratio of normalized EPS, fiscal 2025 | 44% | 52% |
| Payout ratio of normalized EPS, fiscal 2026 consensus | 40% | 44% |
Source: TIKR, Oct. 5, 2026; current dividend rate from StockAnalysis.
U.S. Bancorp is hitting its stride
U.S. Bancorp just turned in a quarter worth paying attention to. Net revenue hit a record $7.7 billion, up 10% from a year earlier, and diluted EPS jumped 22%. Fees were the biggest driver, helped along by the BTIG acquisition. CEO Gunjan Kedia said BTIG brought in about $98 million in its first month, the strongest monthly revenue the firm has ever posted, and management now expects revenue to grow 7% to 9% this year.
A bank’s dividend is better judged against normalized EPS than free cash flow, since loans and deposits run through its cash flow statements and muddy the picture. By that measure, U.S. Bancorp looks comfortable: it paid $2.04 a share in dividends in fiscal 2025 against $4.62 of normalized EPS, a 44% payout ratio.
Analysts expect normalized EPS to climb 13% to around $5.25 in 2026. If they’re right, the payout ratio slips to about 40%, which gives the dividend plenty of room to grow. Add in revenue that is picking up speed, and I like the setup: U.S. Bancorp looks well positioned for another year of dividend growth.
The dividend rose every year from 2016 to 2025, even when normalized EPS fell in 2020 and again in 2022 and 2023…
The main risk is credit. U.S. Bancorp names loan quality among its risks and expects a $160 million reserve build for the Amazon Small Business portfolio it’s buying.
Truist is earning more and buying back stock
Truist’s earnings are bouncing back even faster than U.S. Bancorp’s. Second-quarter EPS rose 37%, which CEO Bill Rogers credited partly to “higher fee income, strong credit performance, and the return of capital to shareholders.” Truist now expects noninterest income to grow about 10% this year. It also cut its net interest income outlook to 1% to 1.5% growth, from 2% to 3%, and it’s pulling back from indirect auto, marine, and RV loans.
Truist gets judged on the same measure. In fiscal 2025, it paid $2.08 a share against $4.01 of normalized EPS, an adequate 52% payout ratio. Nineteen analysts expect normalized EPS to jump 18% to around $4.75 in 2026, helped along by about $5 billion of planned buybacks that shrink the share count. If they’re right, the ratio would fall to a healthier 44%.
The chart shows where the raises stopped. Normalized EPS fell from $5.53 a share in 2021 to $3.59 in 2023, and the dividend has sat at $2.08 since.
At that 2023 low, the dividend took a heavier 58% of earnings.
The main risk is funding costs. Truist names depositors moving into higher-rate products among its risks.
So which dividend wins?
U.S. Bancorp is the better dividend stock. Its dividend is better covered now and next year, and it’s still rising. The business behind it is also growing faster: U.S. Bancorp expects 7% to 9% revenue growth this year, against 3.5% to 4% at Truist.
In dollars, $10,000 in U.S. Bancorp pays about $380 a year now. At its five-year growth rate of 4.0%, that becomes about $539 in year 10. Call it a 5.4% yield on your cash today. Truist would pay about $450 now and $584 in year 10, and U.S. Bancorp wouldn’t catch up until around 2044. Truist’s figure, though, assumes 2.9% a year of growth, and its dividend hasn’t grown since fiscal 2023. At today’s rate, that $450 stays $450.
Truist still makes a fair case. It pays about $70 more a year on $10,000 right now, and its coverage is closing in on U.S. Bancorp’s. It’s also a little cheaper, at 9.6 times forward earnings against 10.5. For investors who want the most income today, Truist delivers it.
Of course, Truist named Mike Lyons to take over as CEO on Sept. 1. A return to raises under him would change this math quickly.
So what is U.S. Bancorp stock actually worth?
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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!
