Last night we saw the news that Wells Fargo & Co. (NYSE: WFC) hiked its dividend to show that it has the top position of core banking strength in America. We expect some similar action from the likes of J.P. Morgan Chase & Co. (NYSE: JPM) if approved after last year’s London Whale debacle. But with Bank of America Corporation (NYSE: BAC) and Citigroup Inc. (NYSE: C) having such low dividend payments, we still consider these banks wild cards (or unlikely) as dividend hikers for their common stockholders.
Now we have word in a press release that Bank of America’s Board of Directors declared a regular quarterly cash dividend on Bank of America common stock of $0.01 per share. In short, no common stock dividend hike from BofA!
The common dividend is payable on March 22, 2013 to shareholders of record as of March 1, 2013. While BofA also declared dividends on its preferred shares, the bank is just not yet where regulators want it to be able to lift its common dividend.
Wells Fargo is paying out about 27% of its adjusted income as the common stock dividend. Bank of America is only paying about 5% of its expected adjusted income to its common holders. Investors are just going to have wait that much longer for BofA to be back at the caliber of banks with an ability to pay out high dividends again. Now that the stock is up so much from the lows of 2011 the bank’s common dividend yields a paltry 0.35%.