Bank stocks are cheap and we value investors love cheap stocks. To top it off, if those stocks offer dividends and are expected to increase them further that is great news for investors with a long-term investing horizon.
Well-known banking industry analyst Dick Bove was on CNBC talking about the big bank stocks and improving balance sheets and likely probability of banks increasing their dividends. Particularly likely to see an increase in dividend yield are banks that have large amounts of treasuries and non-interest income on their balance sheets and lower exposure to real estate and consumer lending.
Dick Bove said, “If you take a look at the liquidity in the banking balance sheets, if you look at the capital that they have as a percentage of assets, if you look at their profits relative to the past two, three, four years, you’ll see that in every case the banks have come back very, very strongly, and therefore, they should be able to get a significant increase in dividends."
Here is the video:
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