#1: Bank of America
Dividend Yield: 0.4%
Payout Ratio: 10%
YTD Performance: +65%
Bank of America was turned down in 2011 when it asked the Federal Reserve for permission to increase its dividend, so it didn’t even bother earlier this year following a round of bank “stress tests.”
BAC’s 1-cent quarterly payout actually represents 400% of its 2011 earnings, so it seems difficult to gripe about the lack of any recent increase. But despite a breakeven third quarter, 2012 earnings are expected to be around 41 cents per share, putting that payout ratio closer to 10%.
Current shareholders might be a little slow to complain, considering that BAC is on pace to finish as the Dow’s best-performing stock of the year at 65% gains for the year-to-date. But considering that run has come amid generous reports with easy year-over-year comparisons, it’s worth wondering whether Bank of America can keep it up.
And with a dividend yield wholly to the right side of the decimal point, income investors have absolutely no reason to wait around and find out.