Dividend hikes coming?
Dividend yields at big banks--the ratio of dividends to share price--have fallen to 1997 levels. According to Bloomberg, the yield for the KBW Bank Index dropped to 1.5 percent in 2009 from 7.5 percent in 2008. As recently as 2007, it was 4.9 percent. But there are signs of hope. JPMorgan Chase may be set to hike its dividend.
It's a big topic among shareholders. Many top banks were forced to slash to a token penny or nickel a share. One risk expert tells Bloomberg that the market is betting on a 5 cent boost to the five cent dividend fairly soon. Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) would then face some pressure to follow suit--Goldman Sachs (GS) and Morgan Stanley (MS) perhaps less so.
For more:
- here's the Bloomberg article
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