Bank of America Latest to Keep Dividend Flat - TheStreet

Bank of America Latest to Keep Dividend Flat

Bank of America kept intact its penny per share dividend intact on Wednesday, joining the rest of its big bank brethren in holding back on boosting its payout.
Publish date:



) -- Investors hoping for a

dividend boost from big banks in the near-term have been doubly disappointed this earnings season.

But as bank stocks have tumbled, the paltry dividend yields have become more attractive, creating an opportunity to buy shares at a discount ahead of distributions in the next couple of months.

Bank of America

(BAC) - Get Report

was the latest on Wednesday to maintain its quarterly dividend, at a penny a share for common stock and $1.75 per share for its 7% Series B Preferred.

Wells Fargo

(WFC) - Get Report

said Tuesday that its payout would be kept steady at a nickel per common share.

JPMorgan Chase

(JPM) - Get Report

, too, announced on Dec. 8 that its common dividend would remain at 5 cents a share, as would distributions for its four classes of preferred stock. Both

Morgan Stanley

(MS) - Get Report


Goldman Sachs

(GS) - Get Report

also kept dividends steady -- at 5 cents per share for Morgan holders and 35 cents per share for Goldman's -- when reporting earnings this month.


(C) - Get Report

hasn't paid common or preferred stock dividends, apart from that owned by the Treasury Department, in over a year. Management didn't indicate any near-term changes to that policy during the company's quarterly report or presentations either.

Investors had the most reason to be hopeful about a potential boost from JPMorgan, since it had been one of the first to repay bailout funds and appeared to be better capitalized than others. In a report three days ahead of JPMorgan's results, Rochdale Securities analyst Richard Bove said "expectations are high," that the company's payout would double to 10 cents a share. If it didn't, he predicted a stock slump as investors "will question its outlook."

Indeed, when JPMorgan issued its report, with a revenue disappointment and a less optimistic tone on credit than investors had hoped for, it set off a broad sell-off in the bank stocks. Since the close just prior to the report's release, JPMorgan's stock has been one of the hardest hit, losing 14%. Bank of America and

Morgan Stanley

(MS) - Get Report

have both dropped 12%; Citigroup and

Goldman Sachs

(GS) - Get Report

have each given up 10%; while Wells Fargo has declined 7%.

As prices have dropped, the dividend yield has become more attractive, even if the actual payout remain relatively meager. JPMorgan's yield has risen seven basis points to 0.52%; Bank of America's has risen three basis points to 0.27%; Wells Fargo's has climbed 5 basis points to 0.74%; Morgan Stanley's has risen 9 basis points to 0.73%; and Goldman's is up 10 basis points at 0.93%.

Looking ahead, JPMorgan common shareholders of record as of Jan. 6 will receive their nickel per share on Jan. 31. Bank of America common investors as of March 5 will get their penny per share on March 26. Wells Fargo common stockholders as of Feb. 5 will get their 5 cents per share on March 1.

Morgan Stanley will make its 5-cent payouts on Feb. 12 to common investors as of Jan. 29, and Goldman will distribute 35 cents per share on March 30 to common investors as of March 2.

-- Written by Lauren Tara LaCapra in New York