10 Best Bank Stocks with High Dividends

7. Morgan Stanley (NYSE:MS)

Number of Hedge Fund Holders: 59

Dividend Yield as of August 4: 3.86%

Morgan Stanley (NYSE:MS) is an American multinational investment banking company that offers a wide range of financial services to its consumers. The stock has risen more than 27%, increasing from approximately $70 per share in early January 2021 to about $96 per share currently. Despite this recent gain, its overall performance has been quite variable over the past three years. A significant factor contributing to this volatility is the company’s difficulties with its Wealth Management division, which has led to its shares experiencing their largest decline in over three years. Since the start of 2024, the stock just managed to return a little over 2%, compared with a 12.7% return for the broader market.

The Wealth Management segment hasn’t always been slow. In fact, it thrived under James Gorman, its former CEO, bringing in steady revenue through fees during market fluctuations. Gorman aimed to manage $10 trillion in client assets, with the division holding $7.2 trillion as of the second quarter of 2024. Despite a slowdown in net asset inflows, Morgan Stanley (NYSE:MS)’s executives reported that the wealth unit is growing within the bank’s anticipated range of 5% to 7% per year. Although the bank is not looking at acquisitions in the immediate future, it might explore opportunities in the next two to four years. Its Wealth Management segment brought in roughly $6.8 billion in revenues, growing from $6.6 billion in the same period last year. The company generated over $15 billion in revenues in Q2 2024, up from $13.4 billion in the prior year period.

Recently, Morgan Stanley (NYSE:MS) hiked its quarterly dividend by 8.8% after passing the Fed’s stress test. The company would now offer a quarterly dividend of $0.925 per share for a dividend yield of 3.86%, as of August 4. The company has not only maintained regular dividend payments to shareholders but has also significantly increased its payouts over time. In the past five years, it has raised its payouts at an annual average rate of 22.6%, which makes MS one of the best dividend stocks in the banking sector. In the second quarter of 2024, the bank returned $134 million to shareholders through dividends.

As of the end of Q2 2024, 59 hedge funds in Insider Monkey’s database held investments in Morgan Stanley (NYSE:MS), up from 56 in the previous quarter. These stakes have a total value of over $3 billion. With over 20.7 million shares, Fisher Asset Management was the company’s leading stakeholder in Q1.