Three large banks, including Wells Fargo (WFC), are among the companies that announced dividend increases this week.
Wells Fargo, one of the nation's largest banks, has been rocked by revelations that numerous customers had accounts opened in their names without their consent. As a result, the San Francisco-based bank's chairman, Elizabeth Duke, and CEO, Timothy Sloan, vowed in a March letter to shareholders that "Our top priority remains rebuilding the trust of our shareholders, customers, team members, communities, and regulators."
The stock has returned 8.7% this year, compared with 16% for the S&P 500.
Investors received some good news on Tuesday when the bank announced it will raise the quarterly dividend to 43 cents a share, up 4 cents, or 10%, from 39 cents. The stock yields 3%.
Wells Fargo and other banks announced their intentions to boost their dividends after the Federal Reserve concluded its Comprehensive Capital Analysis and Review (CCAR) in late June. But Wells Fargo made its official dividend declaration on Tuesday.
BB&T (BBT), a large regional bank based in Winston-Salem, N.C., announced it will boost the quarterly disbursement to 40.5 cents a share, up from 37.5 cents, for an 8% increase. It yields 3%.
It marked the second dividend increase this year for the company. In April, the company's board declared a quarterly dividend of 37.5 cents a share, compared with 33 cents, previously.
Elsewhere in the sector, Comerica (CMA), based in Dallas, plans to raise its quarterly payout to 60 cents a share, up 76% from 34 cents. The bank boosted its dividend in April to 34 cents from 30 cents.
In a press release, the company's chairman and CEO, Ralph W. Babb Jr., cited the bank's "solid financial performance and strong capital position" for allowing the bank to increase its return of capital to shareholders. It was recently yielding 1.4%. Factoring in the higher dividend, the yield would be 2.5%.
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