How Dividends Could Change the Game for Bank of America Corp (BAC): JPMorgan Chase & Co. (JPM), Wells Fargo & Co (WFC)

Crucially, the bank hiked its per-share payouts roughly in time with its rising share prices. That way, yields stayed steady around the 3% mark for several years. Management has said it would like to pay out roughly 30% of earnings in dividend form. That would add up to about $0.08 per share at current run rates, or $0.30 per share against estimated earnings for 2013. At that pace, Bank of America could be back to a 2.5% yield by the end of the year.

BAC Dividend data by YCharts.

You never really know what the Fed might do, but you can bet that a payout hike like that would boost the already strong stock even further. You’ll note that JPMorgan and Wells Fargo now trade above their prices from early 2008, while Bank of America has lost 67% of its value. Citigroup (NYSE:C) , which cut dividends even more and seems further from returning to its old ways, is down by 80%. Big banks live and die by their dividends.

Bank investors everywhere are keeping their fingers crossed for the Fed’s final nod of approval here.

The article How Dividends Could Change the Game for Bank of America originally appeared on Fool.com and is written by Anders Bylund.

Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Bank of America, Citigroup, JP Morgan Chase, and Wells Fargo. Motley Fool newsletter services have recommended buying shares of Wells Fargo.

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