These four passed the Fed’s “stress test”

Article Excerpt

The four lenders below (including American Express— see box) have passed the Federal Reserve’s latest “stress test,”which measures how financial firms would cope with a jump in unemployment, falling stock prices and other unfavourable conditions. As a result, they have all raised their dividends and announced new share buyback plans. WELLS FARGO & CO. $55 (New York symbol WFC; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 5.2 billion; Market cap: $286.0 billion; Price-to-sales ratio: 3.4; Dividend yield: 2.7%; TSINetwork Rating: Average; www.wellsfargo.com) will raise its quarterly dividend by 7.1%, to $0.375 a share from $0.35. The new annual rate of $1.50 yields 2.7%. As well, the bank will likely earmark more funds for share buybacks in 2015 than the $9.4 billion it spent last year. That will help push up this year’s projected earnings to $4.16 a share from $4.10 in 2014. The stock trades at 13.2 times that forecast. Wells Fargo is a buy. J.P. MORGAN CHASE…

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