Bank of America Increases Dividend to $0.28, Analysts Expect Solid Earnings Coverage.

Bank of America will increase its dividend to $0.28, a larger payment than last year. The dividend yield is 2.4%, a modest boost to shareholder returns. The company has a long history of paying dividends and a solid track record of stable distributions. Analysts forecast EPS growth of 37% over the next three years, which should support future dividend payments.

Bank of America Corporation (NYSE:BAC) has announced an increase in its quarterly dividend to $0.28 per share, effective for the dividend payment on September 26, 2025. This represents a $1.12 annualized dividend and a dividend yield of 2.4%, marking a modest boost to shareholder returns. The move follows the company's recent history of stable dividend distributions and comes as analysts forecast EPS growth of 37% over the next three years, which should support future dividend payments.

The increase in the dividend is part of Bank of America's ongoing strategy to return capital to shareholders. The company has a long-standing commitment to dividend payments, reflecting its stable financial performance and strong balance sheet. The recent dividend hike follows a $40 billion stock buyback program announced in July 2025, indicating that the board believes the company's shares are undervalued [1].

Analysts have been generally positive about Bank of America's prospects. Several research firms have recently upgraded their ratings and target prices for the stock. For instance, Goldman Sachs increased its target price from $46.00 to $52.00, while Morgan Stanley raised its target from $47.00 to $49.00. Oppenheimer also boosted its target from $55.00 to $57.00, and Truist Financial increased its target from $51.00 to $53.00 [1].

The company's financial performance has been robust. In its latest quarterly earnings report, Bank of America reported earnings per share (EPS) of $0.89, beating analysts' consensus estimates of $0.86. The company's net margin and return on equity were 14.81% and 10.25%, respectively, while its revenue was up 4.3% compared to the same quarter last year. These strong financials indicate the company's resilience and its ability to generate earnings growth [1].

Bank of America's business model is anchored in resilience, with a countercyclical mix of revenue sources. The strength of its consumer banking segment, which has seen average deposits reach $948 billion in the first quarter of 2025, is a significant strength. This low-cost funding and margin flexibility allow Bank of America to provide loans more cheaply than many of its competitors [2].

In conclusion, Bank of America's increase in its dividend to $0.28 per share is a positive sign for shareholders, reflecting the company's strong financial performance and analysts' positive outlook. The dividend hike, along with the company's ongoing stock buyback program, indicates that the board believes the company's shares are undervalued, providing an attractive opportunity for investors.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-zions-bancorporation-national-association-ut-takes-609000-position-in-bank-of-america-corporation-nysebac-2025-08-10/
[2] https://seekingalpha.com/article/4812003-bank-of-america-mispriced-capital-return-engine