Banking on Bank Dividends? Just Look Outside the U.S.

We all know how the bank dividend story goes. Big money center banks based here in the U.S. and several of their large European counterparts got drunk off the easy money, easy credit cocktail that flowed so freely from 2005-2007. When banks like Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) finally sobered up in late 2008, their balance sheets reeked like drunken sailors and shareholders would soon pay the price with a harsh round of dividend cuts that left investors out in the cold. Prior to those dividend cuts, one of the primary reasons to invest in large-cap bank stocks was the dividends. Bank stocks in the S&P 500 were some of the best, most consistent dividend payers out there. Long story short, that's simply not the case anymore. Big banks, including the ones mentioned above, have been long dividend talk and short on results. Even Goldman Sachs (NYSE: GS), which ended 2009 with $25 billion in free cash, mentioned a dividend hike earlier this year. Again, all talk no action. The moral of this dividend story is that investors hunting for strong yields and healthy dividends are bound to be disappointed if they limit their search to U.S. As is often the case when it comes to dividends, U.S. investors looking for sturdy income from bank stocks should take a global approach. Simply put: There are plenty of non-American banks that thankfully take a non-American approach to taking care of their shareholders.... Read more