BNY Mellon (BK) hiked its dividend to $0.19 after the Federal Reserve approved its capital plans and cleared its stress test results. This dividend, which was effective starting in the third quarter, is a 12% hike from its previous dividend payout of $0.17. Further, the company also plans to buy back shares worth $2.7 billion, 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 and 2008, the company paid a dividend of $0.20 per share, which was slashed to $0.09 during the 2009 recession. Post-recession, the company has gradually increased its dividends.
Share repurchase plans
In 3Q16, BNY Mellon repurchased 11.6 million shares for a total cost $464 million. This is a reflection of the company’s confidence in its current valuations and long-term growth prospects.