Is the Dow Approaching Bubble Territory? – Wal-Mart Stores, Inc. (WMT), McDonald’s Corporation (MCD), Bank of America Corp (BAC)

In B of A’s case, at the end of the third quarter of last year, its Tier 1 common capital ratio was 11.4%, or more than twice the regulatory minimum of 5%. By means of comparison, once the stress test’s “severely adverse” economic scenario was taken into consideration, B of A’s ratio declined to 6.8% — still 180 basis points higher than necessary. CEO Brian Moynihan has refused to admit what exactly the bank has requested from the Fed in this regard, but most analysts are expecting the bank’s now-nominal dividend to double or more.

And JPMorgan fared similarly. While its Tier 1 common capital ratio fell by nearly 40% from 10.4% down to 6.3%, it nevertheless emerged with a 130 basis-point buffer that could be used to pad its shareholders’ pockets. A report last week from the Financial Times said the lending giant will seek $7.5 billion in buybacks, and the consensus estimate is that it’s looking to increase its dividend by $0.06 per share.

The article Is the Dow Approaching Bubble Territory? originally appeared on Fool.com and is written by John Maxfield

John Maxfield owns shares of Bank of America. The Motley Fool recommends McDonald’s. The Motley Fool owns shares of Bank of America, JPMorgan Chase & Co (NYSE:JPM)., and McDonald’s.

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