BNY Mellon (BK) hiked its dividend to $0.19 after the Federal Reserve approved its capital plans in June 2016 and cleared its stress test results. This dividend became effective from 3Q16 onward and represents a 12% hike from its previous dividend payout of $0.17.
Further, BK plans to buy back $2.7 billion in shares, contingent in part on the company issuing $750 million of preferred stock. Bank of New York Mellon (BK) has regularly rewarded its shareholders through dividends and share buybacks.
Between 2005–2008, the company paid dividends of $0.20 per share, which were slashed to $0.09 per share during the 2009 recession. After the recession the company has gradually increased its dividends.
Share repurchase plans
In 4Q16, BNY Mellon (BK) repurchased 18.4 million shares for $848 million. This is a reflection of the company’s confidence in its current valuations and its long-term growth prospects.
US banks (XLF) have been repurchasing shares in order to boost their earnings per share. Recently, JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC) increased their share buyback programs.