terms and conditions
Real-time Company News, Economic Reports, Analyst Calls, Upgrades, Downgrades, Initiations and Key Industry News as it happens.
The next wave of stress tests on the U.S banks is due in the coming week. While many of the banks have reportedly been asking regulators to be less transparent, there are some banks which are likely to come out well ahead under almost all scenarios. The big trick is not just figuring out how much these big banks can really raise their dividends, but how much they really will start paying back to avoid public backlash. Some banks could easily double their dividends and some could triple their dividends. We expect dividend hikes, but some will likely choose share buybacks plus dividend hikes rather than throwing it all into dividends.
J.P. Morgan Chase & Co. (NYSE: JPM) is likely to be the major winner when it comes to dividend hikes and buybacks as far as the safe banks of the “too big to fail” institutions. JPMorgan might not double its dividend from the current $1.00 now to $2.00 on an annualized basis, but it might be able to if it believes that it can sustain $4.00+ in earnings per share. The bank is likely to do a 50% dividend boost at first and begin buying back stock more selectively.
Wells Fargo & Co. (NYSE: WFC) could take its dividend up to $1.50 per share per year with its earnings estimates above $3.00 per share for each of the next two years and that would be a tripling of the payout today. We do not expect that it will raise the payout that much (from only $0.48 annualized today), but it may use much of its excess liquidity to buy back stock selectively.
Bank of New York Mellon Corporation (NYSE: BK) and State Street Corporation (NYSE: STT) are both also expected to come out fine in the stress tests. These banks could probably double their dividends based upon expected earnings of the trust banks, but we are not as sure that they will formally do that.
Bank of America Corporation (NYSE: BAC) and Citigroup, Inc. (NYSE: C) are both expected to try to increase their dividends and share buybacks. Prince Alwaleed bin Talal has already suggested that he will be demanding that Citi raise its dividend. The question is Bank of America because it was only a few months ago that the run on the bank was feared and that Warren Buffett came to the rescue. If it was just having to raise capital last year, regulators are likely to be less eager to allow Bank of America to start sending money out the backdoor to its shareholders.
Of the bulge bracket investment banks, ergo bank holding companies which have no bank operations, there is the case of Goldman Sachs Group, Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS). Each are expected to be able to raise their dividends, but these banks are still more dependent upon the trends of the financial markets than they are real loan and balance sheet performance of the traditional banks.
Starting on Monday we should be getting more of a focus on the stress tests. This week has been dominated by Greece and a slowing story of China and Brazil. More details and more predictions should start coming front and center on Monday.
JON C. OGG
Buzz up! Digg Fark Facebook Reddit Tumblr « Today’s Best Market Rumors (3/8/2012) Apple and Books Beyond Greece: More Questions Than Answers Over Future of CDS Markets » Read more: 24/7 Wall St. Wire, Banking, Dividend, Financial Stocks, Regulation, bank dividends, bank payout ratios, bank share buybacks, bank stress tests, BAC, BK, C, GS, JPM, MS, STT, WFC Popular: How America's Richest Companies Invest Their CashThe Worst-Paying Cities for WomenAmerica's Most Miserable StatesAmerica's Happiest StatesTop Analyst Upgrades & Downgrades (AEO, AAPL, ANGI, ARMH, CIEN, GLUU, AWAY, HALO, JPM, KR, L, QCOM, SSW, VNO, ZNGA) (function($){$(function(){ var count = 0; var rsi = setInterval(function() { if($('#fb-comments iframe').length) { clearInterval(rsi); $('#fb-comments').removeAttr('width');$('#fb-comments,#fb-comments iframe').css('width', '100%'); } if(count++ > 100) { // 10 seconds have gone by, still no iframe. $('#fb-comments').html(""); } }, 100);});})(jQuery); google_ad_client = "pub-8647138831804708"; google_ad_slot = "0533281206"; google_ad_width = 300; google_ad_height = 250; document.write(''); Recent Posts The Six Worst States for Sleep Consumer Fear of High Gas Prices Spreads Airlines Finally Get Tough on Boeing and Airbus Flaws Housing Problems Depend on the House Car Companies Face Dying Growth In Chinese Market Alzheimer's and the Economy What’s Important in the Financial World (3/9/2012) Keystone XL Rejection, China Inflation Media Digest (3/9/2012) Reuters, WSJ, NYT, FT, Bloomberg Today’s Best Market Rumors (3/8/2012) Apple and Books Op-Ed: The Myth of the Out-of-Control Federal Government Get Quote for: Symbol Lookup Search Athens General Index opens 1.5% up after swap deal German DAX 30 index up 0.2% to 6,846 LSE up 2.7% after taking stake in LCH.Clearnet Iraq Starts Oil Exports From New Floating Terminal - Official METALS MOVER: ArcelorMittal Appoints Head Of Mining Health, Safety UPDATE: India Upgrades Fiscal Year Trade Deficit Estimate As February Gap Widens Newt's Right! We Really Could Have $2.50 Gas (for $190 Billion a Year) The 51% Tragedy: A Majority of Young Greek Workers Are Now Unemployed A Lost Decade for Young Workers Is Your Bank Killing Free Checking? Is 'Sou-Sou' for You? Africa's Savings Pool Scheme Lands in America 5 Surprises From the New iPad Launch OTP Bank Sees Its Business Declining In Hungary, Growing Elsewhere More Banks Quoting New Greek Bonds In Grey-Market, Concerns Remain Tata Steel Says UK Green Policy Creates A Disadvantage - Report Greece Clinches Debt Deal With Private Lenders To Avoid Default They're Throwing Rocks At Accountants' Cars RUNNING SCARED? IRS Could Make Political Groups Pay Dearly for Keeping Donors Secret -- And Out Them China Vows Not to Ditch Socialism 'Neon Orange Monstrosity'? Taco Bell Meets Doritos New Super PAC Wants to Dump All Incumbents Tomorrow a Big Day for the Bull Market (WSM, HOTT, MW, JNJ, CAAS, SOL) The Battle Behind the Market's Direction (CIEN, P, TRCR, NUAN, NFLX, AAPL, OUTD, CSIQ) Will Global Woes Drag Us Down? (DKS, PAY, NTRI, MRK, SHFL, ONTY) Tokyo Warned that "Big" Earthquake Coming Don't Factor Syrian Oil into Market Jitters Australia's New $10 Billion Clean Energy Finance Corp. - Benefit or Boondoggle? Home About Us Disclaimer and Terms of Use Privacy Policy Contact Us Advertise ©2012 24/7 Wall St. | Powered by WordPress.com VIP jQuery(function($){ var adBox = null; $(".ad").click(function() { adBox = null; var ad = $(this); var adid = ad.attr('id'); track('Ad Click', adid.match(/ad-(.+)/)[1], "User has clicked on " + ad.attr('addesc')); }); $(".iframe-ad") .mouseover(function(){ adBox = $(this).find('.ad'); }) .mouseout(function(){ adBox = null; }); var adtrack = function(ev) { if(adBox) { track('Ad Click', adBox.attr('adid'), "User has clicked on (iframe) " + adBox.attr('addesc')); adBox = null; } }; $(window).blur(adtrack); $(window).focusout(adtrack); }); if (typeof tb_pathToImage != 'string') { var tb_pathToImage = 'http://247wallst.com/wp-includes/js/thickbox/loadingAnimation.gif'; } if (typeof tb_closeImage != 'string') { var tb_closeImage = 'http://247wallst.com/wp-includes/js/thickbox/tb-close.png'; } label.error { display: block; color: red; } object, embed { position: relative !important; z-index: 0 !important; } /* */ var _qevents = _qevents || [], wpcomQuantcastData = {"qacct":"p-18-mFEk4J448M","labels":",language.en,type.wpcom,posttag.bac,posttag.bk,posttag.c,posttag.gs,posttag.jpm,posttag.ms,posttag.stt,posttag.wfc,vip.247wallst"}; function wpcomQuantcastPixel( labels, options ) { var i, defaults = wpcomQuantcastData, data = { event: 'ajax' }; labels = labels || ''; options = options || {}; if ( typeof labels != 'string' ) options = labels; for ( i in defaults ) { data[i] = defaults[i]; } for ( i in options ) { data[i] = options[i]; } if ( data.labels ) { data.labels += ',' + labels; } else { data.labels = labels; } _qevents.push( data ); }; (function() {var elem = document.createElement('script');elem.src = (document.location.protocol == "https:" ? "https://secure" : "http://edge") + ".quantserve.com/quant.js";elem.async = true;elem.type = "text/javascript";var scpt = document.getElementsByTagName('script')[0];scpt.parentNode.insertBefore(elem, scpt); })(); _qevents.push( wpcomQuantcastData ); /* a.like').click( function(e) { e.preventDefault(); $.post( 'http://247wallst.com/wp-admin/admin-ajax.php', { 'action': 'wpl_record_stat', 'stat_name': 'loggedout_like_click' } ); var tenMins = new Date(); tenMins.setTime( tenMins.getTime() + 600000 ); document.cookie = 'wpl_rand=a261402234; expires=' + tenMins.toGMTString() + '; domain=wordpress.com; path=/;'; $('#wpl-count').after( '\ \ \
Just one more step to like this post:
\ Username \ Password \ \ \ \Not a member yet? Sign up with WordPress.com
\ \ \ '); $('#wpl-mustlogin').hide().slideDown('fast'); } ); $('#wpl-mustlogin input.input').live( 'focus', function() { $(this).prev().hide(); }).live( 'blur', function() { if ( $(this).val() == '' ) $(this).prev().show(); }); $('#wpl-mustlogin input#wp-submit').live( 'click', function(e) { e.preventDefault(); $.post( 'http://247wallst.com/wp-admin/admin-ajax.php', { 'action': 'wpl_record_stat', 'stat_name': 'loggedout_login_submit' }, function() { $('#wpl-mustlogin form').submit(); } ); }); $('#wpl-mustlogin a#wpl-signup-link').live( 'click', function(e) { e.preventDefault(); var link = $(this).attr('href'); $.post( 'http://247wallst.com/wp-admin/admin-ajax.php', { 'action': 'wpl_record_stat', 'stat_name': 'loggedout_signup_click' }, function() { location.href = link; } ); }); }); /* ]]> */ jQuery(document).ready(function($){ Gravatar.profile_cb = function( h, d ) { WPGroHo.syncProfileData( h, d ); }; Gravatar.my_hash = WPGroHo.my_hash; Gravatar.init( 'body', '#wp-admin-bar-my-account' ); }); // st_go({'blog':'5450697','v':'wpcom','user_id':'0','post':'135152','subd':'247wallst'}); function st_vt() {var x=document.createElement("img");x.src="http://stats.wordpress.com/g.gif?blog=5450697&v=wpcomvt&user_id=0&post=135152&subd=247wallst&rand="+Math.random();} ex_go({'crypt':'UE40eW5QN0p8M2Y/RE1BNmNJfGhxNCVxUDExYmtib2E/SzdEJm0lUEtbdFU0fFk4cHZvcUFrZT90Tn4yQm1+R3NyNTdGQWs0Rk9xZ2I1NF9NeFJXd3ViMXhfT2h6WWJkMVRHLzYuT11FdnlEMF84Q19wbjBMbj1uLnp0SnxwZCszbzhYcytoOSZaX05nflhKME9PM1F6S2IrRDF8Uy5mZmxRSjJdUVJVaC9OP01UZlRqejJxS0RoYmFGSzZXeS9BT0ozSzliRXJW'}); addLoadEvent(function(){linktracker_init('5450697',135152);}); WallStPopup("newsletter-popup", "http://247wallst.com/page/newsletter-signup-b", "http%3A%2F%2F247wallst.com%2F2012%2F03%2F08%2Fafter-bank-stress-tests-dividend-buyback-predictions-a-double-jpm-wfc-bk-stt-bac-c-gs-ms%2F", 428, 427, "b", "Newsletter Popup (B)"); Read Full Article »