Key Takeaways
- Fidelity National Information Services fell 24% on Nov. 4 after it cut its 2026 guidance, announced its CFO’s exit and paused buybacks, but it kept its $0.44 quarterly dividend.
- FIS yields 5.8%, and its dividend took 32% of its free cash flow over the twelve months to Sept. 30, 2026.
- U.S. Bancorp yields 3.6%, paid out 44% of its normalized EPS in fiscal 2025, posted record net revenue in the third quarter and raised its dividend 3.8% in June.
- The thing to watch is FIS’s year-end update on its strategic review, and whether the dividend stays put while it pays down $20.8 billion of debt.
Fidelity National Information Services (FIS) fell 24% on Nov. 4. The company cut its 2026 guidance, announced its CFO’s exit and paused buybacks to pay down debt. It left the dividend alone, though, and the $0.44 a quarter it declared on Oct. 29 now works out to a 5.8% yield.
U.S. Bancorp (USB) is having a much calmer fall. It posted record net revenue in the third quarter and raised its dividend 3.8% in June, and it yields 3.6%.
So the choice is a bigger check from a company in the middle of a reset, or a smaller, growing one from a bank on a roll. If I could hold only one for the next 10 years, which would it be?
| Metric | U.S. Bancorp (USB) | FIS (FIS) |
|---|---|---|
| Dividend yield | 3.6% | 5.8% |
| Annual dividend | $2.16 | $1.76 |
| Dividend growth, 5 years | 4.0% a year, fiscal 2020-2025 | 2.7% a year, fiscal 2020-2025 |
| Coverage measure | Payout ratio of normalized EPS | Cash dividend payout ratio |
| Coverage, last reported | 44% (fiscal 2025) | 32% (TTM to Sept. 30, 2026) |
| Coverage, forward | 40% (fiscal 2026 consensus) | 40% (fiscal 2026 consensus) |
Sources: TIKR; StockAnalysis for the current dividend rates and the yields at today’s prices.
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U.S. Bancorp’s dividend has room to grow
U.S. Bancorp’s net revenue hit a record $7.97 billion in the third quarter, up from $7.33 billion a year earlier, as its net interest margin widened to 2.84% from 2.75%.
As a bank, it’s judged on its payout ratio of normalized EPS. Its dividend climbed from $1.07 a share in fiscal 2016 to $2.04 in fiscal 2025, through some big swings in earnings:
The payout peaked at 59.0% in fiscal 2023 and was a comfortable 44.2% in fiscal 2025. Analysts expect 40% in fiscal 2026 as normalized EPS rises 16% to $5.34. CFO John Stern said on the third-quarter call that the bank is “very much committed to the 70% to 75% payout from a capital distribution standpoint,” buybacks included.
Chief Risk Officer Jodi Richard resigned on Oct. 23, and that’s a seat to watch at a bank. Credit is holding up, though: the net charge-off ratio improved to 0.51% in the third quarter from 0.56% a year earlier.
FIS kept its check intact
FIS’s quarter was much messier than U.S. Bancorp’s. It cut its 2026 adjusted EPS guidance to $5.82-$5.89 from $6.15-$6.24, and it expects 2027’s to fall in the high single to low double digits. CFO James Kehoe stepped down on Nov. 5.
FIS is judged on its cash dividend payout ratio. Its free cash flow has covered the dividend with room to spare every year on the chart:
That ratio peaked at 40.5% in fiscal 2024. It was a well-covered 32% over the twelve months to Sept. 30, 2026, and analysts see it at 40% in fiscal 2026.
The debt is heavier. FIS carried $20.8 billion at Sept. 30, and TIKR puts its net debt at 5.3x EBITDA. FIS also ties dividend growth to adjusted EPS growth, so with EPS expected to fall in 2027, I wouldn’t count on a raise next year.
So which dividend wins?
For the next 10 years, my dividend dollars go to FIS.
The income gap is too big to pass up. Put $10,000 in FIS and it pays $583 a year at today’s yield, against $360 from U.S. Bancorp. At each company’s dividend growth from fiscal 2020 to fiscal 2025 (2.7% a year for FIS, 4.0% for U.S. Bancorp), FIS pays about $6,594 over the decade and U.S. Bancorp about $4,314. At those rates, U.S. Bancorp wouldn’t catch up for more than 30 years. Even if FIS never raised again, it would pay $5,830 over those 10 years.
FIS can keep paying it while it pays down debt. The stock is cheap, too, at 5.5x forward earnings against a five-year average of 11.7x:
U.S. Bancorp has a strong case of its own. Its business is growing, and its dividend has plenty of room under that 70% to 75% target. At its 5-year rate, its check would reach about $511 in year 10, a 5.1% yield on the $10,000. It’s just that FIS already pays more than that today.
FIS’s company-wide strategic review is still under way, and a fuller update is due with its year-end results. If that comes with a smaller dividend to speed up the debt paydown, I’d rethink this.
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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!
