Why Shareholder Payouts for Bank of America Could Rise Further

After the reduction in tax rates, clearance of stress tests, and higher operating cash flow generation, banks (XLF) are in a favorable position to improve payout ratios. Investors have long been seeking higher payout ratios after the 2007 financial crisis. Bank of America (BAC) grew its dividend 60% to $0.12 in 4Q17 from the prior year’s corresponding period payout, helped by strong operating performance and the clearance of stress tests.