10 Best Bank Stocks with High Dividends

3. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 82

Dividend Yield as of August 4: 2.77%

Bank of America Corporation (NYSE:BAC) is an American multinational financial services and investment banking company. In a notable recent development, Berkshire Hathaway‘s top investors have sold Bank of America shares for 12 straight trading days, from July 17 to August 1. In total, they sold 90,422,124 shares, raising approximately $3.82 billion. According to analysts, the selling of BofA shares could be attributed to the bank’s sensitivity to interest rates. While BofA previously benefited significantly from rising rates, the anticipated start of a rate-cutting cycle in September might result in a faster decline in its net interest income compared to its competitors. For years, the company has been the second-largest investment in Berkshire Hathaway’s portfolio, trailing only tech giant Apple. BAC is up by over 8% year-to-date.

ClearBridge Investments highlighted the interest rate pressures on Bank of America Corporation (NYSE:BAC) in its q1 2024 investor letter. Here is what the firm has to say:

“We added several new positions during the quarter. Our largest new addition was Bank of America Corporation (NYSE:BAC), one of the world’s leading financial institutions, serving some 66 million consumer and small business clients across the U.S. as well as large corporations, financial institutions and governments globally. We believe that the interest rate pressure that Bank of America faced in early 2023 has subsided, and risks surrounding deposit outflows have abated, which should allow the company to improve its book value and capital growth as well as benefit from a rebound of capital markets activity.”

Bank of America Corporation (NYSE:BAC) is a strong dividend payer. The company has never missed a dividend in the past 26 years. In July, it announced an 8% increase in its quarterly dividend to $0.26 per share. During the second quarter of 2024, the company returned nearly $2 billion to shareholders through dividends, which makes BAC one of the best dividend stocks in the banking sector. As of August 4, the stock has a dividend yield of 2.77%.

According to Insider Monkey’s database of Q1 2024, 82 hedge funds owned stakes in Bank of America Corporation (NYSE:BAC), down from 96 in the preceding quarter. The total value of these stakes is more than $45.5 billion.