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April arrived in conjunction with an abundance of dividend stocks news.
While some companies are in the news due to commencement or changes in dividend payments, others made the news for different reasons. We will examine and report the top news stories for dividend stocks to keep you informed of current happenings.
Here is a recap of the biggest dividend stocks news affecting some big-name income investments right now…
The Latest Dividend Stocks News Roundup
AmTrust Financial Services Inc. (Nasdaq: AFSI)
In association with its subsidiaries, AmTrust Financial Services Inc. serves its customers by underwriting and providing a broad variety of property and casualty insurance products. The company made news this past week by being recognized by Forbes magazine as a top company for insider trading.
AFSI earned the dreary distinction because one of its directors, George Karfunkel, enlarged his portfolio significantly last December by purchasing more than $8 million in shares at a cost per share of $28.99. April 1 saw shares trading at $36.77, which represents a $26.9% increase over Karfunkel’s purchase price per share.
CitiGroup Inc. (NYSE: C) Investors May Bypass Fed Efforts to Restrain Dividend Increase
In a top dividend stock news story, investors in one of the United States’ leading banks were denied a boost in dividend payments after the annual “stress test” administered by the Federal Reserve. CitiGroup was hoping to raise its annual dividend by $0.10 per share, as well as repurchase its stock, but was denied based upon the Comprehensive Capital Analysis and Review (CCAR).
However, by using some creative trading, investors may still be able to recoup a dividend increase. This could be accomplished by selling calls against a stock, or selling puts on stocks they own.
The move is not without risk. For instance, if the stock rises higher or lower than the call and strike rates, the investors have no choice but to buy or sell the stock. This may fall outside the parameters of the price at which the investors wished to execute the transaction.
In the meantime, investors are awaiting the release of CitiGroup’s first-quarter earnings report, scheduled later this month on April 14.
Blue Chip Bank Stocks Set To Boost Dividends
Inversely from the CitiGroup situation, many other banks fared well from the Federal Reserve’s “stress test,” paving the way for dividend payments that reflect the nod of approval. Banks such as Bank of America (NYSE: BAC) and Morgan Stanley (NYSE: MS) are among those expected to pay out the largest percentage increase in dividends. While the yield will likely remain mild to moderate, the trend is a positive one.
For instance, Bank of America’s dividend payments are projected to soar from a measly $0.05 cents per share to $0.24 cents per share. Morgan Stanley’s dividends will rise from $0.11 cents to $0.31 cents. The yields on both remain less than 1.5%, but the increase is solid.
In other dividend stocks news, a few banks fared less well, including U.S. Bancorp (NYSE: SB), JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo (NYSE: WFC). While their dividends are expected to increase, the rate will be 10% or less.
Good News for American International Group Inc. (NYSE: AIG)
Investors in American International Group were pleased to learn from the company’s February announcement that dividends will be increased. This news comes approximately a year after the company’s payout was reinstated. Financial reports show a shift towards increased profits from last year.