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

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How much?
While it seems that BB&T is strong enough to request a substantial increase of its dividend, I believe investors may want to temper their expectations. The Fed has explicitly said that dividend payout ratios above 30% will receive “particularly close scrutiny”; BB&T’s current dividend payout ratio is hovering around the 30% level. If the Fed and the bank cannot agree on a substantial dividend increase, BB&T Corporation (NYSE:BBT) may request additional share buybacks, an action  much easier to scale back compared to the scrutiny of cutting a dividend. Therefore, I expect BB&T to ask and receive approval for a slight dividend increase, as well as additional share repurchases.

The article Will BB&T Increase Its Dividend? originally appeared on Fool.com and is written by David Hanson

David Hanson has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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