CHARLOTTE, N.C. - Bank of America Corporation (NYSE:BAC) announced today that its Board of Directors has declared an increase in the quarterly cash dividend on common stock to $0.26 per share, a $0.02 rise from the previous quarter. The dividend will be payable to shareholders of record as of September 6, 2024, on September 27, 2024.
In addition to the dividend increase, the Board has authorized a new $25 billion stock repurchase program, set to commence on August 1, 2024. This new program will replace the existing buyback plan, which is due to expire on the same date and currently has about $6.7 billion remaining for stock repurchases.
The new buyback program is part of Bank of America's ongoing strategy to return excess capital to shareholders while maintaining its commitment to invest in future growth and maintain stability throughout economic cycles.
The company's ability to return capital to shareholders, including the execution of stock repurchases, is dependent on maintaining regulatory capital levels above the minimum requirements. Factors that may influence the timing and amount of stock repurchases include the company's capital position, liquidity, financial performance, stock price, regulatory constraints, and market conditions.
Repurchases may be conducted through open market purchases or privately negotiated transactions, potentially utilizing Rule 10b5-1 plans.
Furthermore, a regular quarterly cash dividend of $1.75 per share was declared on the 7% Cumulative Redeivable Preferred Stock, Series B, payable on October 25, 2024, to shareholders of record as of October 11, 2024.
Bank of America's forward-looking statements, as defined under the Private Securities Litigation Reform Act of 1995, reflect its expectations based on current information, which may change due to various factors. The company cautions that these statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.
Bank of America is a leading global financial institution offering a wide range of services to consumers, businesses, and large corporations. The company's stock is traded on the New York Stock Exchange under the ticker NYSE:BAC. This news is based on a press release statement.
In other recent news, Bank of America has experienced significant changes and developments. The company recently announced the promotion of Kevin Brunner to the position of head of technology, media, and telecommunications (TMT) investment banking. This move coincides with the departure of Sam Powers, the former head, who has joined Advance, a company with holdings in various TMT and education sectors.
Meanwhile, Berkshire Hathaway (NYSE:BRKa), led by Warren Buffett, has reduced its holdings in Bank of America by selling approximately 33.9 million shares, amounting to roughly $1.48 billion. Despite this, Berkshire Hathaway still retains a substantial number of shares in the bank.
In terms of analyst views, Phillip Securities has downgraded Bank of America's stock from a Buy to a Neutral rating, despite an 8% increase in their FY24 earnings estimate. On the other hand, BMO Capital Markets has maintained a Market Perform rating for the bank's stock, increasing the price target to $40 from $38, following Bank of America's strong second-quarter financial performance.
These are recent developments, and they reflect the dynamic nature of the banking industry. Despite facing challenges due to increased deposit costs and changes in the Federal Reserve's policy, Bank of America continues to show resilience, with a notable 29% surge in its investment banking revenues.
InvestingPro Insights
Bank of America Corporation (NYSE:BAC) has shown a strong commitment to shareholder returns, as evidenced by their recent dividend increase. This dedication is further highlighted by the company's impressive track record of raising its dividend for 10 consecutive years, according to InvestingPro Tips. The firm's status as a prominent player in the banking industry is reinforced by its ability to maintain dividend payments for over half a century.
The financial strength of Bank of America can be observed through key metrics from InvestingPro Data. The company boasts a solid market capitalization of approximately $328.25 billion USD, reflecting its significant presence in the market.
Furthermore, the P/E ratio stands at a competitive 14.77, with a slight adjustment to 14.39 when looking at the last twelve months as of Q2 2024. This indicates a reasonable valuation compared to earnings. Moreover, the company has experienced a large price uptick over the last six months, showcasing investor confidence and a strong stock performance.
For those interested in further financial details and analysis, InvestingPro offers additional insights. There are 5 more InvestingPro Tips available that can help investors make informed decisions about Bank of America. To delve deeper into these valuable insights, readers may visit InvestingPro and consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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