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Updated with important news about Park National Corp.
NEW YORK (
TheStreet) -- Many banks have increased their dividend payouts this year, while very few have lowered them, and the weakness in share prices has pushed dividend yields even higher.
With short-term rates likely to remain near zero for some time and long-term rates heading lower in the wake of the
Federal Reserve's "Operation Twist," familiar banking names with high dividend payouts are looking more and more attractive for income-seeking investors.
According to KBW's Dividend Tracker, 30 publicly traded banks and thrifts raised their dividends during the third quarter. The only publicly traded bank lowering its dividend was
Tower Bancorp (TOBC) of Harrisburg, Pa., which has a deal in place to be acquired by
Susquehanna Bancshares (SUSQ) of Lititz, Pa. One company --
Suffolk Bancorp (SUBK) of Riverhead, N.Y. -- eliminated its dividend during the third quarter.
The weakness in stock prices for the entire banking sector has propped up dividend yields for the higher payers. Using data provided by SNL Financial, TheStreet has identified the 10 publicly traded banks and thrifts with the highest dividend payouts, excluding companies trading on the Pink Sheets and two less actively traded names with average daily trading volume of less than 50,000 shares.
Back in August, we identified a
select group of 10 bank dividend stocks, taking a far more conservative approach, by excluding companies paying out more than 50% of earnings.
This time we have included all the actively traded high-yielding names, most of which are headquartered in the North East. Some have high dividend payout ratios which don't tell the full story. Some have been expanding in a major way, taking advantage of the cut-rate prices and bank failures to make strategic acquisitions.
At a time of daily uncertainty for most stocks and ever-declining fixed-income yields, it pays to take a look at the bank dividend stocks. If you develop confidence that one or more of these names will easily support the dividend and maybe even increase it as earnings increase, you could be looking at a bargain right now, setting yourself up for major gains down the road when bank valuations return to more normal levels, enjoying a steady dividend return while you wait.
TheStreet's10 bank stocks with dividend yields up to 8%, in order of ascending dividend yield: