Looking at Financial Sector Dividends

Higher dividends are a major theme this year for investors. This is a welcomed change from 2008 and 2009 when huge numbers of firms cut back on their payouts.

This is especially true for the financial services sector. Thanks to TARP restrictions (and bombed-out cash flows), many firms slashed their quarterly dividends to the bone — some even to one penny per share. To give you an example of how dramatic this has been, the Financial Sector ETF (XLF) paid out 26 cents per share for Q4 2007. Recently, it’s paid out three cents per quarter.

At some point soon, we’re going to see much higher dividends from financial stocks. Below is a list of 32 major financial stocks. I’ve listed each stock’s peak quarterly dividend before the crisis, the current dividend, and what I feel is their dividend potential for next year.

When I say “dividend potential,” I don’t mean this as a prediction. In fact, I doubt many firms will be willing to raise their dividends so dramatically. (For example, I doubt Goldman Sachs will do much of anything.) Consider my estimate to be at the high end. But I do believe it’s what they could do if they wanted. I’ve also added what the yield is based on my estimate of each stock’s dividend potential.

Company Ticker Symbol Peak Dividend Current Dividend Dividend Potential Potential Yield
Allstate ALL $0.41 $0.20 $0.34 4.2%
Bank of America BAC $0.64 $0.01 $0.12 3.7%
BB&T BBT $0.47 $0.15 $0.17 2.8%
Bank of New York Mellon BK $0.24 $0.09 $0.22 3.3%
Boston Properties BXP $0.68 $0.50 $0.56 2.6%
Citigroup C $0.54 $0.00 $0.04 3.6%
Comerica CMA $0.66 $0.05 $0.18 1.8%
Capital One COF $0.38 $0.05 $0.36 3.6%
First Horizon National FHN $0.43 $0.00 $0.04 1.5%
Fifth Third Bancorp FITB $0.44 $0.01 $0.08 2.6%
Goldman Sachs GS $0.35 $0.35 $1.49 3.8%
Huntington Bancshares HBAN $0.27 $0.01 $0.04 2.4%
Hartford Financial Services HIG $0.53 $0.05 $0.31 5.0%
Host Hotels & Resorts HST $0.40 $0.01 $0.11 2.8%
JP Morgan Chase JPM $0.38 $0.05 $0.38 3.8%
KeyCorp KEY $0.38 $0.01 $0.03 1.6%
Kimco Realty KIM $0.44 $0.16 $0.16 3.8%
Legg Mason LM $0.24 $0.04 $0.16 2.0%
Lincoln National LNC $0.42 $0.01 $0.31 5.0%
Marshall & Ilsley MI $0.32 $0.01 $0.01 0.1%
Morgan Stanley MS $0.27 $0.05 $0.26 4.0%
ProLogis PLD $0.52 $0.15 $0.10 3.2%
PNC Financial PNC $0.66 $0.10 $0.49 3.7%
Regions Financial RF $0.38 $0.01 $0.03 1.5%
Simon Property Group SPG $0.90 $0.60 $0.80 3.3%
SunTrust Banks STI $0.77 $0.01 $0.07 1.0%
State Street STT $0.24 $0.01 $0.31 3.2%
U.S. Bancorp USB $0.43 $0.05 $0.18 3.2%
Vornado Realty Trust VNO $0.95 $0.65 $0.67 3.1%
Wells Fargo WFC $0.34 $0.05 $0.24 3.7%
XL Group XL $0.50 $0.10 $0.20 3.6%
Zions Bancorporation ZION $0.43 $0.01 $0.04 0.7%

Posted by on October 13th, 2010 at 8:04 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.