In this article, we discuss 5 companies that recently raised their dividends. If you want to read our detailed discussion on dividend stocks, go directly to read These 10 Companies Recently Increased Their Dividends.
5. Bank of America Corporation (NYSE:BAC)
Dividend Yield as of July 21: 2.52%
Bank of America Corporation (NYSE:BAC) is a multinational investment bank and financial services holding company headquartered in North Carolina.
In Q2 2022, Bank of America Corporation (NYSE:BAC) reported average deposits of $2 trillion, up 7% from the previous quarter. The company returned $2.7 billion to shareholders in dividends and share buybacks during the quarter. On July 20, Bank of America Corporation (NYSE:BAC) declared a 5% hike in its quarterly dividend to $0.22 per share. This was the company’s 9th consecutive year of dividend increase. As of July 21, the stock’s dividend yield came in at 2.52%.
In July, Societe Generale upgraded Bank of America Corporation (NYSE:BAC) to Buy with a $37.5 price target, highlighting the company’s loan portfolio and sensitivity to rising interest rates.
At the end of Q1 2022, 99 hedge funds in Insider Monkey’s database owned stakes in Bank of America Corporation (NYSE:BAC), up from 84 in the previous quarter. These stakes are collectively valued at over $45.4 billion. Berkshire Hathaway held the largest stake in the company in Q1, worth $41.6 billion.
“There are many times when volatility and beta give false signals. Banks outperformed in the post-tech bubble bear market of the early 2000s. At the market peak prior to the financial crisis (when risk was the highest in those names!), Bank of America (NYSE:BAC) had a 0.9x beta (based on the trailing 5 years) suggesting its “risk” was below the market’s. Wrong! It massively underperformed in the financial crisis. Realized beta over the 5 years from the pre-crisis’ 2006 peak measured 2.3x.
A much better indicator of actual risk, both before and after the financial crisis, was the quality of the balance sheet and risk-taking appetite. Beta is backwards looking and non-stationary. Relying on it underestimated risk going into the financial crisis and overestimated coming out of it (its beta has continued to fall over the past decade).
We care greatly about risk. We spend a significant amount of time thinking about the risks to our investments. We measure risk as permanent impairment of capital, which means the prices and values don’t bounce back. Business fundamentals determine risk.”