This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Bank of America Dividend Raise Likely: CEO

Stocks in this article: BAC USB BK WFC JPM PNC STT

NEW YORK ( TheStreet) -- Bank of America (BAC) has repaired its balance sheet and plans to raise its dividend next year, CEO Brian Moynihan said Tuesday.

"We have reached the amount of capital we need to run this company," Moynihan said in a speech at a Goldman Sachs conference.

Moynihan also appears to have intended to say the bank plans to raise the dividend next year above its token level of a penny per share. Asked by a Goldman analyst if the bank would raise its dividend next year, Moynihan appeared to say,

"I don't see anything that would stop us from not being successful."

While that translates to "we won't be successful," a Bank of America spokesman said Moynihan actually meant a dividend increase was likely.

"I thought he said he didn't see anything that would stop us from being successful, meaning he would expect a reinstatement of the dividend sometime in 2011," wrote spokesman Jerry Dubrowski in an email exchange.

Moynihan said he expects to institute a normalized shareholder payout ratio of 30% of earnings, which is well below previous levels.

Bank of America paid out 73% of earnings in dividends in 2007, and between 46-47% from 2004-2006, according to Federal Reserve data provided by SNL Financial.

Moynihan said he believes Bank of America was too aggressive with dividend payouts in 2007-2008.

"We paid dividends too long in the cycle. I'd love to have that capital back."

Carole Berger, analyst with Luna Analytics, argued on Monday Bank of America won't be returning capital to shareholders "in any significant amount" until 2012 or 2013.

Several banks are expected to boost dividends well ahead of Bank of America, including Wells Fargo (WFC), US Bancorp (USB), JPMorgan Chase (JPM), PNC Financial (PNC), State Street Corp. (STT)and Bank of New York Mellon (BK).

RELATED STORIES:

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs