Banks Cutting Dividends - Beware of High Yields

Huge write offs and slumping earnings have forced many financial institutions to cut their dividend payments. According to SNL Financial, 55 banks and thrifts cut dividends in 2007 and more cuts are on the way in 2008. So far, 42 banks have cut dividends this year. Here are five: Citigroup (C), KeyCorp (KEY), National City (NCC), Wachovia (WB) and Washington Mutual (WM).

Whose next? Very high dividend yields are one signal that a dividend cut is probable. Here are five banks with yields over seven percent: Bank of America (BAC), Comerica (CMA), Fifth Third (FITB), Regions Financial (RF) and SunTrust Banks (STI).

Beware of high dividend yields, particularly in uncertain times. Enticing yields brought about from falling prices can be treacherous.

Related Articles:

Dividend Reinvestment Portfolio
Dividend-Paying Stocks Create Wealth
Falling Prices Push Up Dividend Yields
Why Dividends Matter


Posted June 14, 2008.