Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Will BB&T Corporation (BBT) Increase Its Dividend?

Last week, the Federal Reserve released the first part of the annual banking stress tests results, which examined the impact of a severe economic downturn on the largest U.S. banks. While almost every bank showed improvement year over year, BB&T Corporation (NYSE:BBT) posted especially encouraging results. The results highlighted the strength and sustainability of BB&T’s balance sheet and loan portfolio.

How it fared last week
Despite posting a lower actual Tier 1 common ratio in Q3 in 2012 compared to 2011 because of its acquisition of Bank Atlantic and Crump Insurance, BB&T Corporation (NYSE:BBT) posted an impressive minimum Tier 1 common ratio of 9.4% under the severely adverse scenario. During the previous year’s tests, BB&T’s minimum Tier 1 common in the doom-and-gloom scenario was 7.3%. Regardless of some investors clamoring about the ease of the tests this year, it’s hard to deny the improvements BB&T Corporation (NYSE:BBT) has made to its balance sheet and business prospects.

BB&T Corporation (NYSE:BBT)These strong results have driven investors to tune into the Comprehensive Capital Analysis and Review results, which will be released on Thursday afternoon. Within this release from the Fed, investors will see if the participating banks sought and received approval for any increases in dividends or share buyback programs. Investors will also get to see the impact of any new capital plans on stressed ratios.

Source: Dodd-Frank Act Stress Test 2013: Supervisory Stress Test Methodology and Results.

Should BB&T request another bump?
Last year, BB&T asked and received approval for a 25% increase in quarterly dividend payments. Additionally, the Fed did not reject the company’s proposal to redeem $3.2 billion of trust preferred securities. Given the substantial improvement of its balance sheet under a stressed scenario, BB&T seems to have ample leverage in negotiating any additional actions to return more cash to shareholders. The market recognizes the value of BB&T’s balance sheet as shares currently trade at almost 2 times its tangible book value, well above the average in the U.S. banking industry.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.