) raised its common share dividend by one cent or 4.3% to 24
cents per share on Tuesday. The dividend will be paid on Jun 2 to
shareholders of record as of May 16.
Since the second half of 2004, this Winston-Salem, NC-based
financial holding company has regularly paid dividends to
shareholders. In fact, this major regional bank continued to pay
dividend even amid the financial crisis of 2008.
However, following the crisis, dividend was slashed from 47
cents per share to 15 cents per share. Thereafter, the company
started to increase the dividend pay out again. Notably, prior to
the latest hike, BB&T had increased its dividend in Jan 2013
by 15% to 23 cents per share.
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The latest dividend hike follows the recent review of BB&T's
capital plan, which received no objection from bank regulators.
The rise in pay out reflects BB&T's commitment to enhance
The company's business model permits it to efficiently generate
and deploy capital. Rise in loans and a strong capital position
should enable BB&T to maintain its growth momentum. Moreover,
prudent expense management, improved credit quality and
profitability ratios are the tailwinds. However, the company's
plan to grow inorganically may put pressure on its expense
management going forward.
A tepid economic recovery, low interest-rate environment and
regulatory pressure are the other challenges.
At present, BB&T carries a Zacks Rank #4 (Sell). We believe
that announcement of the dividend hike will boost shareholders'
Some better-ranked major regional bank stocks include
The PNC Financial Services Group, Inc.
Wells Fargo & Co.
). All of these have a Zacks Rank #2 (Buy).