Boston, MA 03/25/2014 (wallstreetpr) – Bank Of America Corp (NYSE:BAC) is receiving buy recommendations from left, right and center. And after the company passed stress test, the buy calls have been overwhelming. A closer look at the stock reveals that there is nothing really wrong with the buy recommendations. Yet, investors are wise to buy the stock after consuming some important information.
During Monday session, shares of BAC fell 1.08 percent to $17.37. It was a relatively large volume session, but far less than normal volume of shares changed hands. The shares escalated to a high of $17.65 and traded as low as $17.30 on the day. There was a story on that shares descent, it provided a perfect entry opportunity for investors who heeded the buy recommendation, and it was a rare opportunity at best.
In the pre-market session Tuesday, the shares were last seen up more than 0.40 percent.
Dividend hike
For investors who want more, it is nice to note that Bank Of America Corp (NYSE:BAC) which has previously failed to convince regulators to increase its dividend payout, looks like it is poised to secure a dividend-hike nod this time around after exceeding the capital requirement.
In the aftermath of the financial crisis, Fed has been trying to ensure that banks attain financial stability that would ensure that they can avoid collapse in worst case scenario. On that note, BAC has been working to shore up their balance sheets and in the process Fed capped dividend amount. But now the bank is out of the woods and dividend hike is eminent.
The bank is expected to improve its dividend payout from the current 1 cent to between 4 and 5 cents. If this level of hike is secured, it will be a well-deserved reward for the shareholders.
Shares repurchase
Bank Of America Corp (NYSE:BAC) is also expected to boost its share repurchase program. This will end up putting more money back to the shareholders.
Whether it is dividend hike or shares repurchase or both, the bottom line is that the company has a lot of goodies in store for the shareholders. But a point to note is that Bank Of America Corp (NYSE:BAC) usually doesn’t hike its dividend as expected.
Shares of the company could breach their five-year high price of $19.50 if the management boost dividend beyond expectation.
