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Morgan Stanley’s dividend was increased above analysts’ forecasts.
Getty Images/Stephen Chernin
Morgan Stanley is a financial services firm based in
After passing the Federal Reserve’s stress tests last week, the bank quadrupled its dividend, joining a procession of big banks that raised their quarterly payouts for the first time in two years on Monday. Morgan Stanley (ticker: MS), which has profited in recent months from its trading and investment banking strengths, increased its dividend to 70 cents from 35 cents, above Barclays analyst Jason Goldberg’s bullish expectation of 55 cents.
Morgan Stanley’s stock plummeted 70 cents to $87.70 on Monday before the news, yielding 3.2 percent.
Morgan Stanley shares were up 3% to $90.62 in after-hours trade.
The Goldman Sachs Group is a global investment bank.
(GS), which has recently posted record earnings, increased its quarterly dividend by 60%, to $2 per share from $1.25, matching Goldberg’s forecast. Based on Monday’s closing price of $368.71, Goldman shares will yield 2.2 percent. The Federal Reserve has requested that banks delay making statements about their dividend plans until 4:30 p.m. Monday. Leader in the field
JPMorgan Chase & Co., Inc.
JPMorgan Chase & Co. (JPM) upped its quarterly dividend to $1 from 90 cents, as predicted. Its shares, which are currently trading at $154, have a 2.6 percent yield.
Bank of America is a financial institution based in the United
(BAC) said that it would increase its quarterly dividend by 17 percent, to 21 cents per share, in line with market expectations. Based on its closing price of $41.56 on Monday, its shares will yield 2%.
Citigroup
“We look forward to continue with our planned capital measures, which include common distributions of at least 51 cents per share,” (C) added. It pays out 51 cents right now. A new dividend of roughly 54 cents is expected, according to analysts. “The Fed stress tests were a source of redemption for the banks,” said Mike Mayo, a Wells Fargo financial analyst. “During the recession, the banks had the resolve and wherewithal to prevent dividend cutbacks, and they now have the capacity to enhance dividends.” Mayo made these remarks prior to today’s bank moves. He stated, “This is a new day for banks.” “It reflects some of the most solid financial statements in a generation.” According to Mayo, “new investors” will be drawn to banks because of their increased dividend security and a mix of dividends and stock buybacks that may produce a total annual yield of roughly 8%, compared to about 5% for trash bonds. During the next 12 months, several large banks are likely to return 100% or more of their earnings to shareholders in the form of stock buybacks and dividends. The dividend and buyback proposals must be approved by the boards of directors of the institutions. Andrew Bary can be reached at andrew.bary@barrons.com.
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