Bank of America’s earnings report beat analyst estimates and the stock has been on an upward spiral lately. To top this off, they also announced a dividend increase of 12%. So the shares I bought at $44.55 pay out $2.24 per year in dividends which amounts to a yield of 5.03%.
The share price is currently $51.66. My plans to unload this stock are put on hold as I think the price has more appreciating to do. A couple more quarters of dividends couldn’t hurt either. I don’t think price depreciation is likely as the current dividend justify these prices and some growth prospects could justify pricing the stock even higher. Time will tell, as always.
Current performance for holding BAC 1 year is 16% capital gain + 4.5% paid in dividends = 20.5% annual gain. I love it when your “safe” stocks outperform your expectations.
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