Colin Barr of Fortune has written an article about the status of some bank stock dividends. Big banks' dividend gamble
Disclosure: The Div Guy owns shares of BAC at the time of this post.The predicted demise of bank dividends has been greatly exaggerated.
Two big banks, Wachovia (WB) and Regions Financial (RF), cut their quarterly payouts Tuesday in a bid to conserve cash. The banks join finance-industry titans such as Citi (C), Fannie Mae (FNM) and Freddie Mac (FRE), all of which have cut back on dividends over the past year in a bid to conserve capital against rising loan losses.
But with most of the biggest U.S. banks having reported their second-quarter earnings over the past week, what's striking is how many lenders chose to maintain their quarterly payouts - even as shares in the sector remain battered and worries intensify about a second-half slowdown.
On Tuesday, CEO James Wells of Atlanta-based SunTrust (STI) said his bank doesn't have any plans to cut its dividend or sell common stock, saying a recent sale of Coca-Cola stock gives the bank sufficient capital against future losses. Bank of America (BAC) chief Ken Lewis went even further Monday, saying BofA will maintain its 64-cent quarterly payout because it's confident of weathering the credit storm.
There will be some real winners that come out of this mess. I am not selling any banks unless they cut their dividend.
Best Wishes,
D4L
D4L,
I just wish I had some more cash to make some additional purchases.