12 Best Bank Dividend Stocks to Buy Now

In this article, we discuss 12 best bank dividend stocks to buy now.

The banking system around the world underwent major structural reforms during the pandemic in 2020. As physical branches were closed down, the banks chose to shift their operations to digital channels. Even after the pandemic, consumers have continued using digital banking, calling it more convenient than traditional banking. According to a survey by Bankrate, nearly two-thirds of the population in the US uses digital banking services, Moreover, the number of digital users increased by 4% this year from 2018.

The S&P Bank Select Industry Index is down by 10.89% year-to-date, compared with a 19.05% drop in the S&P 500, as of the close of October 30. Despite the current market downturn, US banks reported $64.4 billion in profits in the second quarter of 2022, up 7.8% from the previous quarter, as reported by Reuters. Further analyzing the banking sector, we will discuss the best bank stocks that pay dividends. Some of the names mentioned below include U.S. Bancorp (NYSE:USB), JPMorgan Chase & Co. (NYSE:JPM), and Bank of America Corporation (NYSE:BAC).

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Our Methodology:

The companies mentioned below are from the banking sector and pay regular dividends to shareholders. The stocks are ranked according to their dividend yields, as of October 31.

Best Bank Dividend Stocks to Buy Now

12. American Express Company (NYSE:AXP)

Dividend Yield as of October 31: 1.39%

American Express Company (NYSE:AXP) is an American financial services and credit card services company. It also provides other banking services to its consumers. In Q3 2022, the company reported a 21% growth in its card member spending due to continued momentum across goods, traveling, and services spending. During the quarter, the company paid nearly $14 million in dividends to shareholders.

American Express Company (NYSE:AXP) is one of the best dividend stocks on our list as it has been making consistent dividend payments for the past 30 years. Currently, it pays a quarterly dividend of $0.52 per share and has a dividend yield of 1.39%, as of October 31.

In October, BMO Capital lifted its price target on American Express Company (NYSE:AXP) to $166 with a Market Perform rating on the shares. The firm appreciated the company’s higher net interest income and lower costs.

As of the close of Q2 2022, 67 hedge funds tracked by Insider Monkey owned stakes in American Express Company (NYSE:AXP), compared with 69 a quarter earlier. These stakes have a consolidated value of over $25.2 billion. Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q2.

In addition to U.S. Bancorp (NYSE:USB), JPMorgan Chase & Co. (NYSE:JPM), and Bank of America Corporation (NYSE:BAC), American Express Company (NYSE:AXP) is another prominent bank dividend stock.

11. Bank of America Corporation (NYSE:BAC)

Dividend Yield as of October 31: 2.43%

Bank of America Corporation (NYSE:BAC) is a North Carolina-based multinational investment bank and financial services holding company. Appreciating the company’s solid Q3 earnings, BMO Capital lifted its price target on the stock in October to $41 and maintained a Market Perform rating on the shares. The firm highlighted the company’s pre-provision net revenue which has shown a 24% growth from the previous quarter.

In the third quarter of 2022, Bank of America Corporation (NYSE:BAC) reported revenue of $24.5 billion, which showed an 8% growth from the same period last year. The company remained committed to its shareholder obligation as it paid $1.8 billion in common dividends during the quarter. Moreover, it also repurchased $450 million worth of common shares.

Bank of America Corporation (NYSE:BAC) currently pays a quarterly dividend of $0.22 per share. The company has been raising its dividends consistently for the past nine years, which makes it one of the best dividend stocks in the banking sector. As of October 31, the stock has a dividend yield of 2.43%.

At the end of Q2 2022, 99 hedge funds tracked by Insider Monkey owned stakes in Bank of America Corporation (NYSE:BAC), the same as in the previous quarter. The combined value of these stakes is roughly $36 billion.

Diamond Hill Capital Management mentioned Bank of America Corporation (NYSE:BAC) in its Q2 2022 investor letter. Here is what the firm has to say:

“Bank of America Corporation (NYSE:BAC) shares were weak in Q2 as the market became increasingly focused on the possibility of a near-term recession and the potential for credit losses along with current fee revenue pressures.”

10. Wells Fargo & Company (NYSE:WFC)

Dividend Yield as of October 31: 2.59%

Wells Fargo & Company (NYSE:WFC) is an American multinational financial services company that provides banking, investment, and mortgage products and services to its consumers. The company raised its dividends twice this year which places it as one of the best dividend stocks on our list. It pays a quarterly dividend of $0.30 per share for a dividend yield of 2.59%, as of October 31.

In October, Piper Sandler raised its price target on Wells Fargo & Company (NYSE:WFC) to $49 with an Overweight rating on the shares. The firm appreciated the company’s Q3 results and also expects it to remain resilient in the current environment.

At the end of Q2 2022, 83 hedge funds tracked by Insider Monkey owned stakes in Wells Fargo & Company (NYSE:WFC), down from 93 a quarter earlier. These stakes hold a collective value of over $5.1 billion. Eagle Capital Management was the company’s leading stakeholder in Q2.

9. CVB Financial Corp. (NASDAQ:CVBF)

Dividend Yield as of October 31: 2.78%

CVB Financial Corp. (NASDAQ:CVBF) is a California-based bank holding company that provides various banking and trust services to its consumers. The company has been making consecutive dividend payments for the past 132 quarters, coming through as one of the best dividend stocks. Currently, it offers a quarterly dividend of $0.20 per share and has a dividend yield of 2.78%, as of October 31.

In the third quarter of 2022, CVB Financial Corp. (NASDAQ:CVBF) reported revenue of roughly $145 million, which showed a 27.4% growth from the same period last year. The company paid $80.2 million in dividends to shareholders during the quarter. Its payout ratio for the quarter stands at a healthy 43%.

As of the close of Q2 2022, 10 hedge funds tracked by Insider Monkey owned stakes in CVB Financial Corp. (NASDAQ:CVBF), the same as in the previous quarter. These stakes have a collective value of over $63.4 million.

8. Cathay General Bancorp (NASDAQ:CATY)

Dividend Yield as of October 31: 2.99%

Cathay General Bancorp (NASDAQ:CATY) is an American bank that provides a wide range of financial services to its consumers. In July, Stephen initiated its coverage on the stock with an Equal Weight rating and a $45 price target, highlighting the company’s consistent high single-digit loan growth.

In Q3 2022, Cathay General Bancorp (NASDAQ:CATY) reported a net income of $99 million, up from $72 million in the same period last year. The company’s total loans increased 7.8% year-over-year to $18.1 billion. It has a very strong dividend payout ratio of 25.3%.

Cathay General Bancorp (NASDAQ:CATY) does not have any dividend growth streak but the company has paid regular dividends to shareholders even during the pandemic. It currently pays a quarterly dividend of $0.34 per share and has a dividend yield of 2.99%, as of October 31.

At the end of June 2022, 18 hedge funds in Insider Monkey’s database owned stakes in Cathay General Bancorp (NASDAQ:CATY), the same as in a quarter earlier. These stakes are valued at over $113 million. Among these hedge funds, Holocene Advisors was the company’s leading stakeholder in Q2.

8. JPMorgan Chase & Co. (NYSE:JPM)

Dividend Yield as of October 31: 3.15%

JPMorgan Chase & Co. (NYSE:JPM), an American multinational investment banking company, pays a quarterly dividend of $1.00 per share and has a dividend yield of 3.15%, as of October 31. The company has been raising its dividends consistently for the past seven years, which makes it one of the best dividend stocks in the banking sector.

During the third quarter of 2022, JPMorgan Chase & Co. (NYSE:JPM) paid $3 billion in dividends to shareholders, which shows that the company’s cash flow is stable. Its revenue for the quarter showed a 10.4% growth from the same period last year at $32.7 billion.

Citigroup mentioned JPMorgan Chase & Co. (NYSE:JPM) in its October investors’ note and said that JPM is one of the most reliable stocks for long-term investors. The firm raised its price target on the stock to $135 with a Buy rating on the shares.

As of the close of Q2 2022, 104 hedge funds tracked by Insider Monkey owned stakes in JPMorgan Chase & Co. (NYSE:JPM), falling from 110 in the previous quarter. These stakes hold a combined value of over $5.8 billion, compared with $5 billion worth of stakes owned by hedge funds in the previous quarter.

6. The Bank of New York Mellon Corporation (NYSE:BK)

Dividend Yield as of October 31: 3.50%

The Bank of New York Mellon Corporation (NYSE:BK) is an American corporate investment banking company that provides related services to its customers. In Q3 2022, the company reported revenue of $4.3 billion, up 6% from the same period last year. The company’s net interest revenue increased by 44%. During the quarter, it paid $303 million to shareholders in dividends, which makes it one of the best dividend stocks on our list.

On October 17, The Bank of New York Mellon Corporation (NYSE:BK) declared a quarterly dividend of $0.37 per share, in line with its previous dividend. The company has paid regular dividends to shareholders for the past 21 years. It can be a good addition to dividend portfolios alongside other bank dividend stocks like U.S. Bancorp (NYSE:USB), JPMorgan Chase & Co. (NYSE:JPM), and Bank of America Corporation (NYSE:BAC).

Citigroup upgraded The Bank of New York Mellon Corporation (NYSE:BK) to Buy in October with a $46 price target, acknowledging the company’s strong return outlook and capital return capacity. The firm also mentioned that the company has an upside to net interest income estimates.

At the end of June 2022, 38 hedge funds in Insider Monkey’s database owned stakes in The Bank of New York Mellon Corporation (NYSE:BK), down from 54 in the previous quarter. These stakes are collectively valued at over $3.6 billion. First Eagle Investment Management was one of the company’s leading stakeholders in Q2.

Ariel Investments mentioned The Bank of New York Mellon Corporation (NYSE:BK) in its Q4 2021 investor letter. Here is what the firm has to say:

“Rising interest rates, after a surprisingly long period of low absolute rates and negative “real” rates, will create a headwind. While there has been much debate about the cause of these low rates, we believe the most important factor has been the $120 billion in monthly federal reserve open market bond purchases and the accumulation of an $8 trillion balance sheet. The former will end, and the latter will shrink. It is not just the Fed that has aggressively purchased bonds, bidding up prices and lowering yields. Bond traders and hedge fund managers have added to positions, confident that being on the same side as the Fed was the wise place to be. Now as the Fed is about to become a seller of bonds rather than a buyer, Wall Street’s “smart money” is likely to follow suit. Against this backdrop, fixed income securities and bond substitutes such as high dividend paying utilities and absolute return hedge funds are substantially overpriced and are not likely to produce attractive returns going forward.

This expectation of a reversion to the mean for interest rates helped 2021 performance, though not as much as we had hoped. The yield on the U.S. 10-year Treasury did indeed increase from +0.92% at the beginning of the year to +1.52% at year-end. An underreported story was the poor performance of bonds last year. The Barclays Aggregate Index declined -1.67% for the year ending December compared to a return of +28.71% for equities as measured by the S&P 500. Interest rates have continued to climb in 2022 with the 10-year Treasury at +1.79% as we go to print. This move higher in rates has contributed to our good, early start to 2022. Smaller positions in The Bank of New York Mellon Corporation (BK) also benefited from higher rates, principally with their ability to invest customer cash.”

5. The PNC Financial Services Group, Inc. (NYSE:PNC)

Dividend Yield as of October 31: 3.69%

The PNC Financial Services Group, Inc. (NYSE:PNC) is an American bank holding company and financial services corporation. The company is one of the best dividend stocks to buy as it has been paying dividends to shareholders consistently for the past 30 years, compared with a sector median of 13 years. Moreover, the company has raised its payouts for 12 years in a row. Currently, it pays a quarterly dividend of $1.50 per share and has a dividend yield of 3.69%, as of October 31.

In Q3 2022, The PNC Financial Services Group, Inc. (NYSE:PNC) reported revenue of $5.55 billion, up 6.7% from the same period last year. The company returned $1.7 billion to shareholders during the quarter, $600 million of which represented dividend payments.

In October, JPMorgan maintained an Overweight rating on The PNC Financial Services Group, Inc. (NYSE:PNC) with a $171.50 price target, highlighting the company’s strong fundamentals in a rising interest rate period.

At the end of Q2 2022, 42 hedge funds tracked by Insider Monkey reported owning stakes in The PNC Financial Services Group, Inc. (NYSE:PNC), compared with 49 in the previous quarter. These stakes have a total value of roughly $593 million. D E Shaw was the company’s leading stakeholder in Q2.

4. First Hawaiian, Inc. (NASDAQ:FHB)

Dividend Yield as of October 31: 4.04%

First Hawaiian, Inc. (NASDAQ:FHB) is a Hawaii-based bank holding company and one of the country’s largest financial institutions. In Q3 2022, the company reported revenue of $208.6 million, which showed a 14.2% growth from the same period last year. Its net income for the quarter came in at $69 million.

Though First Hawaiian, Inc. (NASDAQ:FHB) hasn’t raised its dividends since 2018, the company paid regular dividends to shareholders throughout this period. It currently pays a quarterly dividend of $0.26 per share and has a dividend yield of 4.04%, as of October 31. Its dividend payout ratio of 48% makes it one of the best dividend stocks on our list.

At the end of Q2 2022, 17 hedge funds tracked by Insider Monkey owned stakes in First Hawaiian, Inc. (NASDAQ:FHB), up from 15 in the previous quarter. These stakes have a consolidated value of over $92.8 million. Yacktman Asset Management owned the largest stake in the company in Q2.

3. Citizens Financial Group, Inc. (NYSE:CFG)

Dividend Yield as of October 31: 4.09%

An American bank holding company, Citizens Financial Group, Inc. (NYSE:CFG) has raised its dividends at a CAGR of 20.41% in the last five years. The company pays a quarterly dividend of $0.42 per share and has a dividend yield of 4.09%, as recorded on October 31.

In its recently announced Q3 2022 earnings, Citizens Financial Group, Inc. (NYSE:CFG) posted revenue of $2.17 billion, up 31.5% from the same period last year. The company’s average loans and average deposits were up 2% and 1% from the previous quarter, respectively.

Morgan Stanley reiterated its Overweight rating on Citizens Financial Group, Inc. (NYSE:CFG) in October with a $48 price target, appreciating the company’s consistent loan growth and strong fundamentals.

The number of hedge funds tracked by Insider Monkey owning stakes in Citizens Financial Group, Inc. (NYSE:CFG) grew to 43 in Q2 2022, from 41 in the previous quarter. These stakes have a collective value of over $525.2 million.

2. Citigroup Inc. (NYSE:C)

Dividend Yield as of October 31: 4.42%

Citigroup Inc. (NYSE:C) is a New York-based multinational investment banking company that provides related financial services to its consumers. The company is one of the best dividend stocks on our list as it has raised its dividends at a CAGR of 20.59% in the last five years. It currently pays a quarterly dividend of $0.51 per share and has a dividend yield of 4.42%, as of October 31.

In Q3 2022, Citigroup Inc. (NYSE:C) generated over $9 billion in free cash flow, which was enough to support its dividend payments worth over $1 billion. The company has a safe payout ratio of 29%, which further signals dividend growth.

BMO Capital maintained an Outperform rating on Citigroup Inc. (NYSE:C) in October with a $71 price target, highlighting the company’s strong performance across Services and Branded Cards.

As of the close of Q2 2022, 82 hedge funds tracked by Insider Monkey owned stakes in Citigroup Inc. (NYSE:C), down from 88 in the previous quarter. These stakes have a consolidated value of over $7.4 billion. Among these hedge funds, Berkshire Hathaway was the company’s leading stakeholder in Q2.

Diamond Hill Capital mentioned Citigroup Inc. (NYSE:C) in its Q1 2022 investor letter. Here is what the firm has to say:

“Shares of Citigroup declined in the quarter as investors became increasingly negative on capital markets activity. The company is also continuing to divest certain consumer banking geographies which may be dilutive to earnings in the near term.”

1. U.S. Bancorp (NYSE:USB)

Dividend Yield as of October 31: 4.48%

U.S. Bancorp (NYSE:USB) is one of the largest banking institutions in the US that provides financial advisory and other banking services to its consumers. The company is one of the best dividend stocks on our list as it has been raising its dividends consistently for 12 years. Currently, it offers a quarterly dividend of $0.48 per share and has a dividend yield of 4.48%, as of October 31.

In October, JPMorgan maintained an Overweight rating on U.S. Bancorp (NYSE:USB) with a $46 price target. The firm presented a positive outlook on the banking stocks in this current market environment.

The number of hedge funds tracked by Insider Monkey having stakes in U.S. Bancorp (NYSE:USB) stood at 43 in Q2 2022, growing from 40 in the previous quarter. The collective value of these stakes is over $6.5 billion. In addition to Warren Buffett, Ken Griffin, Jim Simons, and Donald Yacktman were some other prominent shareholders of the company in Q2.

ClearBridge Investments mentioned U.S. Bancorp (NYSE:USB) in its Q4 2021 investor letter. Here is what the firm has to say:

“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We have increased our exposure to interest-rate sensitive banks by adding to existing positions in U.S. Bancorp.”

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Disclosure. None. 12 Best Bank Dividend Stocks to Buy Now is originally published on Insider Monkey.