Tuesday, July 2, 2019

Higher dividends make U.S. banks look like utility stocks

Banks emerged as an alternative to utilities for income-seeking stock investors even before the largest U.S. lenders passed the Federal Reserve’s stress tests. The projected dividend yield on the KBW Bank Index surpassed the yield on the Dow Jones Utility Average a week ago for the first time since February 2009, according to data compiled by Bloomberg. The milestone was reached three days before the release of the test results, which led 13 of the 24 companies in KBW’s index to raise dividends or say they will consider doing so. “Move over, utilities,” Mike Mayo, a Wells Fargo & Co. bank analyst, wrote in a note.

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