Bank of America Finally Raises Its Dividend

This has been a rather unusual day so far on Wall Street. I often caution investors that announced mergers deals can fall through. Today we learned that Sprint is no longer trying to buy T-Mobile. The anti-trust issues were apparently too much. Also, 21st Century Fox has ended its bid to buy Time Warner. Both TWX and TMUS are down sharply this morning.

I’ve steered clear of Citigroup and Bank of America even though both banks appear to be cheap based on most valuation metrics. Before considering them, I’ve wanted to see them raise their dividends, but the Fed has kept a leash on that. For me, it’s a signal that the banks aren’t quite so risky.

BAC finally got approval to raise their quarterly payout from one penny per share to five cents per share. Based on yesterday’s close, the yield will rise from 0.26% to 1.32%. That’s better, but still not much. Citigroup still pays a penny per share even though the bank earned $4.39 per share last year.

The Commerce Department reported that the trade deficit dropped to $41.5 billion in June. That was less than forecast. Compared with the pre-recession peak, exports are up 18% while imports are up 2%.

Posted by on August 6th, 2014 at 11:41 am


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