Dividend stocks from the banking sector are expected to see increased payouts in the upcoming year, according to a Motley Fool report. Big banks Wells Fargo, JPMorgan Chase, and US Bancorp are expected to announce by next Monday their plans to raise dividends. The big question is whether or not dividend investors, burned by both plunging stock prices and slashed dividend earnings in the financial meltdown of 2008, will be ready to reenter the market. “Will investors welcome those companies back to the dividend-paying fold with open arms?” asked the report. “Or will memories of disappearing income and ugly brokerage statements keep investors skeptical about their futures?”
Such a move by banks has been anticipated since December, when Wells Fargo, Bank of America, and PNC all expressed a desire to pay shareholders through share buybacks and dividends. The Fed will play a large role in how the banks make decisions. “Just as government pressure following the TARP bailouts during the financial crisis almost certainly played a role in the banks' decisions to cut their dividends two years ago, the Federal Reserve's input on the banks' capital plans should be a key part in whatever decisions the banks make in restoring their payouts,” said the Motley Fool.
Source: Third Age
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