The financial crisis lead to dividend cuts amongst several prominent dividend payers such as Bank of America (BAC), US Bancorp (USB) and BB&T Corp. (BBT). Over the past few weeks however, several financial companies announced that they might reconsider their current dividend policies and start raising distributions in the near future.
US Bancorp’s (USB) CEO is reviewing the company’s dividend payout, after it paid off $6.6 billion in TARP money back to the US Treasury."You will see us take action in the near-term that will be favorable," to the dividend, the company’s CEO said. The company cut dividends in March by 88% and is currently paying a quarterly dividend of 5 cents/share.
BB&T’s (BBT) President and CEO Kelly King informed shareholders the bank will "revist dividend level as soon as appropriate". The company cut its dividend by 68% in May 2009 in order to be able to repay the US Treasury. In addition to that the Winston-Salem, North Calorila based banking institution sold $1.5 billion in stock.
JP Morgan’s (JPM) CFO was a little less optimistic about the future dividend prospects of his company, citing that the company’s goal is to restore dividend only if economy doesn't "double dip". Despite the fact that he is still cautious on restoring the dividend, the CFO said the bank could raise its dividend to $0.75-$1.00/share. The company cut its dividend by 87% to 5 cents/share in February 2009.
Analysts are also expecting Pfizer (PFE) to increase dividends as well in the near future. Deutsche Bank analysts expect Pfizer Inc to increase its dividend in December. Deutsche Bank sees an increase of 15 percent to 25 percent. Pfizer cut its dividend by 50% in January in an effort to conserve cash in order to pay for its acquisition of Wyeth (WYE).
While I am generally very skeptical about companies which cut distributions, I view companies that begin raising distributions within a year of the cut very positively. It is too early to get excited about the companies listed above however. As long as they fail to actually increase distributions by sending bigger checks to shareholders, then the prospect of them raising dividends is a pure speculation.
Full disclosure: None
- BB&T Corporation (BBT) Stock Dividend Analysis
- Should you sell after a dividend cut?
- Is Pfizer (PFE) a value trap for investors?
- US Bancorp (USB) cuts its dividend by 88%
Popular Posts
-
Warren Buffett is arguably the best investor in the world. He has turned Berkshire Hathaway into one of the largest companies in the world ...
-
I have reviewed nine companies in this article. Each company announced a dividend increase last week, and has managed to increase distributi...
-
A dividend increase shows a commitment to enhancing total shareholder returns through both strong business performance and returning cash to...
-
Last week, there were ten dividend growth companies, which rewarded their shareholders with a dividend increase. This list was generated by ...
-
Coca-Cola (KO) is a dividend king , which has managed to increase dividends to shareholders for 57 years in a row. The company has paid divi...
-
A few days ago, I posted an inspiring quote on Twitter . I stated that if you have a portfolio worth $1 million, you can easily expect to ge...
-
Simon Property Group (SPG) is a global leader in the ownership of premier shopping, dining, entertainment and mixed-use destinations. Its pr...
-
Factors that boards of directors consider when setting the dividend include future earnings expectations, payout ratio and dividend yield re...
-
The goal of every dividend investor is to generate a sufficient stream of passive dividend income, that would adequately cover their expens...
