U.S. banks still a good choice for dividend seekers

Article Excerpt

U.S. regulators have now directed banks to stop share buybacks and delay any planned dividend increases until the end of September. That would help shield their capital reserves in light of COVID-19’s economic disruption. However, their strong dividends should start rising again in 2021 as the U.S. economy reopens. J.P. MORGAN CHASE & CO. $95 is still a buy. The company (New York symbol JPM; Conservative-Growth Payer Portfolio, Finance sector; Shares o/s: 3.1 billion; Market cap: $294.5 billion; Dividend yield: 3.8%; Divd. Sustainability Rating: Above Average; www.jpmorganchase.com) last raised its quarterly dividend with the October 2019 payment by an impressive 12.5%. Investors now receive $0.90 a share. The annual rate of $3.60 yields 3.8%. Morgan’s revenue in the first quarter of 2020 fell just 3.0%, to $28.3 billion from $29.1 billion a year earlier. That’s despite COVID-19’s impact on borrowing. Earnings, however, declined 68.8%, to $2.87 billion from $9.18 billion. The drop is due to a 454% increase in Morgan’s provision for potential credit losses. That…

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