Bank Of America Corp.'s Trust Preferred Securities About To Put More Money In Your Pocket

On 6/10/15, Bank of America Corp.'s Trust Preferred Securities ( MER.PRM) will trade ex-dividend, for its quarterly dividend of $0.4031, payable on 6/15/15. As a percentage of MER.PRM's recent share price of $25.59, this dividend works out to approximately 1.58%, so look for shares of MER.PRM to trade 1.58% lower — all else being equal — when MER.PRM shares open for trading on 6/10/15. On an annualized basis, the current yield is approximately 6.30%, which compares to an average yield of 5.69% in the "Financial" preferred stock category, according to Preferred Stock Channel.

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As of last close, MER.PRM was trading at a 2.36% premium to its liquidation preference amount, versus the average premium of 1.64% in the "Financial" category. Investors should keep in mind that the shares are not cumulative, meaning that in the event of a missed payment, the company does not have to pay the balance of missed dividends to preferred shareholders before resuming a common dividend. The chart below shows the one year performance of MER.PRM shares, versus BAC:

Performance Comparison Chart

Below is a dividend history chart for MER.PRM, showing historical dividends prior to the most recent $0.4031 on Bank of America Corp.'s Trust Preferred Securities:

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