BB&T Rewards Shareholders: Time To Hold On To The Stock?
Zacks Investment Research | Feb 22, 2018 10:49PM ET
BB&T Corporation (NYSE:BBT) in a bid to pass on tax reform benefits to its shareholders announced 13.6% dividend hike to 37.5 cents per share and a one-time dividend. Both capital actions have been approved by the Federal Reserve.
BB&T will pay 4.5 cents per share of one-time dividend on Mar 20 to shareholders of record as of Mar 6. This is in addition to the earlier announced quarterly dividend of 33 cents per share, which will be paid on Mar 1 to shareholders of record as of Feb 9.
The bank expects the dividend payment of 37.5 cents per share to be continued in the second quarter of 2018 as well. Further, BB&T intends to request for additional capital deployments including dividend raise while submitting the 2018 capital plan to the Fed for review.
In fact these are in addition to what the company had announced in December 2017 following the passage of the revised tax act. BB&T had notified additional investments of $152 million “in its associates and communities.” These included increasing minimum pay rate to $15 per hour, one-time bonus of $2,000 to roughly 75% of its associates and a $100-million donation to its philanthropic fund.
Notably, BB&T is not the only bank that has undertaken such measures following the passage of the tax act. Several banks including Washington Federal, Inc. (NASDAQ:WAFD) , Fifth Third Bancorp (NASDAQ:FITB) and Texas Capital Bancshares, Inc. (NASDAQ:TCBI) also passed on the benefits to their employees in the form of pay rise and one-time bonus, and plan to upgrade technology.
Although for income investors, this is a great opportunity to chip in with their money but is BB&T worth a look for earning this additional dividend income? Let’s explore this Zacks Rank #3 (Hold) stock’s financial performance and fundamentals to understand its share of risks and rewards.
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