Bank Dividends Fail to Rally Stocks

Last Friday, bank investors were supposed to have gotten the news they had been anticipating for the past two years. After submitting capital plans to the Federal Reserve, the Fed gave several banks the green light to begin returning capital to shareholders. The resumption of dividends and share buybacks were supposed to launch bank shares higher, as investors chased higher yields and banks reduced their share counts. So why have bank shares failed to take flight? First, a look at what the new plans look like at the nation's largest banks. JPMorgan (JPM) is upping the dividend to $1 a year, from $0.20, as well as a $15 billion stock buyback program. Wells Fargo (WFC) announced a special dividend of $0.07 a share, in addition to the $0.05 quarterly dividend. It also approved a buyback of 200 million shares. Goldman Sachs (GS) is allowed to buy back the stake it... Read more