This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bank Of America Corp (BAC) Boosts Dividend For First Time In 7 Years

Stocks in this article: bac C RBS SAN ZION

Market reaction to the dividend increase is muted since most investors expected something before the end of the year

Bank of America Corp (BAC) was able to increase its dividends for the first time since the financial crisis after the Federal Reserve announced that it had approved the banks resubmitted capital plans earlier today. Bank of America's original capital plans were also approved by the Fed, but when it discovered errors that affected the results of the stress test it was forced to go through the process again. Bank of America has increased its quarterly dividend from $0.01 to $0.05 per share.

Market is unmoved by dividend increase

Bank of America Corp (BAC) watched its stock drop 6% when it first told regulators that it had found a mistake in data it used for the 2014 Comprehensive Capital Analysis and Review CCAR, because it meant not only that it would have to spend time and energy preparing another capital plan, but that buybacks were probably off the table for the year. Bank of America re-submitted its plans on May 27, according to its press release.

Analysts did expect to see a dividend increase this year once the new plans were approved, which probably explains why the market hasn't had a bigger reaction to the news BAC is up about 0.5%, but still below the last month's average price.

At the time Morgan Stanley analysts Betsy L. Graseck and Michael J. Cyprys felt that the market was also assuming there would be no buybacks through 2016, which seemed like an overreaction considering the amount of capital that Bank of America has on its balance sheet and goes counter to CEO Brian Moynihan's stated goal to return capital to shareholders.

Bank of America dividend increase follows Zions recent capital plan approval

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

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