Bank of America Announces Increased Dividend and New $40 Billion Stock Buyback Plan

Bank of America has announced a $0.02 increase in its regular quarterly cash dividend to $0.28 per share and authorized a new $40 billion stock buyback initiative. The company's average target price is $51.47 with an upside of 6.93% from the current price of $48.14. Its average brokerage recommendation is currently 2.0, indicating "Outperform" status.

Bank of America Corporation (NYSE: BAC) has announced a significant move to return capital to shareholders. The company's board of directors declared a regular quarterly cash dividend of $0.28 per share, up from $0.26 per share in the previous quarter [2]. Additionally, the board authorized a new $40 billion stock buyback program, effective August 1, 2025, to replace the current program which will expire on that date [1]. As of June 30, 2025, the current program had approximately $9.1 billion in common stock repurchases remaining.

The new buyback program reflects the company's commitment to returning excess capital to shareholders that is not needed to support economic growth, deliver for customers and communities, invest in the future, and sustain strength and stability through the economic cycle [1].

The announcement comes after several major U.S. banks, including JPMorgan Chase and Morgan Stanley, have announced their own share buyback plans following this year's U.S. Federal Reserve stress tests [1]. Bank of America's shares have been performing well, climbing about 10% so far this year, and the new buyback program has sent shares up further in late New York trading.

The company's ability to make capital distributions, including the new buyback program, depends on its ability to maintain regulatory capital levels above minimum capital requirements. The timing and amount of common stock repurchases may be subject to various factors, including the company's capital position, liquidity, financial performance, and alternative uses of capital, stock trading price, regulatory requirements, and general market conditions [2].

Analysts have been positive about Bank of America's stock. MarketBeat reports that the average brokerage recommendation is currently 2.0, indicating an "Outperform" status, with an average target price of $51.47, representing an upside of 6.93% from the current price of $48.14 [3].

References:

[1] https://www.businesstimes.com.sg/companies-markets/banking-finance/bank-america-buy-back-us40-billion-shares-new-programme
[2] https://finance.yahoo.com/news/bank-america-increases-common-stock-201500608.html
[3] https://www.marketbeat.com/ratings/by-issuer/bank-of-america-stock-recommendations/