Is Citigroup About to Increase Its Dividend by 400%?
A new research report published by Markit Group predicts that Citigroup will increase its dividend by as much as 400% after the results of this year's Comprehensive Capital Analysis and Review are released in March.
The firm's conclusion is based on an analysis of 23 of the 30 banks that must undergo the CCAR process. According to the report's authors:
The most aggressive moves are expected from Citigroup and Bank of America. They are the last of the major banks paying minimal dividends, and change is overdue. In previous years, the Fed approved share repurchases for both firms. However, both have exhibited improving earnings and capital ratios over 2013 thanks to diversified business lines, strong balance sheets, expense management, and improving credit metrics. Both are on target to meet or exceed minimum Basel III capital requirements.
Given how inaccurate predictions like these tend to be, what's the likelihood that Markit is right this year? Not very, says Motley Fool contributor John Maxfield. Among other things, Citigroup CEO Michael Corbat has been clear that the New York-based bank still has a deep-seated bias toward share buybacks as opposed to dividends.
To learn more about this, check out the following video, in which John marshals additional evidence to show that Citigroup will probably wait at least one more year before raising its still-nominal payout.
Check out this list of high-yielding dividend stocks
One of the dirty secrets that few finance professionals will openly admit is that dividend stocks as a group handily outperform their non-dividend-paying brethren. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.
The article Is Citigroup About to Increase Its Dividend by 400%? originally appeared on Fool.com.John Maxfield owns shares of Bank of America. The Motley Fool recommends Bank of America and owns shares of Bank of America and Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.