- BAC dividends rose to $0.32 per share quarterly, a 14.3% increase that annualizes to $1.28.
- A 26% payout ratio and 11.2% CET1 capital ratio support the bank’s dividend capacity.
- The 2.04% forward yield remains below BAC’s five-year average as shares trade near a 52-week high.
Dividend snapshot
Bank of America’s latest raise improves income, though the current yield remains modest for a bank-stock portfolio.
Bank of America (NYSE: BAC) now pays a quarterly dividend of $0.32 per share, up from $0.28. That annualizes to $1.28, producing a 2.04% forward yield at a share price near $62.68.
The stock went ex-dividend on September 4, and the next payment is scheduled for September 25. Investors buying after the ex-dividend date generally will not receive this month’s payment.
The increase is meaningful. BAC’s 14.3% quarterly dividend increase represents its sixth consecutive annual raise.
Its dividend-growth record also remains solid, with annualized growth of roughly 9% over one, three, and five years. For investors prioritizing rising income rather than high current yield, that combination is attractive.
Capital strength supports the payout
Earnings power and regulatory capital are the key protections behind BAC’s dividend.
BAC’s dividend appears well covered. The bank’s payout ratio is about 26%, leaving substantial earnings retained for loan growth, reserves, buybacks, and regulatory needs.
A 26% payout ratio and 7.9% three-year dividend-growth rate suggest management has room to keep increasing the payout, assuming credit quality and earnings remain healthy.
Capital is another positive. BAC maintained an 11.2% CET1 capital ratio against a 10% regulatory minimum, giving it a cushion above required levels.
Its $30.5 billion of 2025 earnings and $9.1 billion of second-quarter 2026 net income point to improving profit capacity from net interest income, trading, wealth management, and investment banking.
Management also had approximately $17 billion of buyback authorization remaining. Repurchases do not put cash directly in investors’ pockets like dividends, but reducing the share count can support per-share earnings and future dividend capacity.
Yield is decent but valuation is less compelling
New buyers should distinguish BAC’s dividend quality from its entry-price appeal.
BAC trades near its 52-week high of $65.23, and its current 2.04% yield is below its five-year average yield of roughly 2.48%. That means investors are receiving less income for each new dollar invested than they historically have.
At about 14.48 times trailing earnings, BAC is not priced like a deep-value bank. One valuation review placed shares 16.3% above an estimated $54.12 intrinsic value, while also noting insider sales and cautious institutional positioning.
Dividend investor takeaway
BAC looks best suited to patient investors seeking dividend growth, not maximum current income.
BAC’s dividend appears sustainable thanks to conservative earnings coverage, strong capital, and sizable buyback capacity. However, its 2.04% yield may be insufficient for investors needing immediate portfolio income.
A practical approach is to consider BAC for a diversified dividend-growth allocation, ideally through staged purchases or on price weakness. Watch net interest income, deposit costs, credit losses, and potentially higher global-systemic-bank capital requirements in 2027.
Those factors will determine whether today’s $0.32 quarterly BAC dividend can continue climbing.
