Bank of America Initiates $25 Billion Stock Buyback and Raises Dividend, Boosting Investor Confidence

Bank of America shares are showing positive movement in premarket trading today after the company announced a significant stock buyback plan. The Board of Directors has authorized a $25 billion share repurchase program that will start on August 1, 2024. This new program will replace the current buyback plan, which has approximately $6.7 billion remaining as of June 30, 2024. The decision to initiate a larger buyback program indicates the bank’s confidence in its future performance.

Additionally, Bank of America has raised its quarterly cash dividend, bringing it to $0.26 per share, an increase of $0.02 from the previous quarter. This dividend will be paid on September 27 to shareholders who are on record as of September 6. The Board also declared a cash dividend of $1.75 per share on its 7% Cumulative Redeemable Preferred Stock, Series B, which will be payable on October 25 to shareholders as of October 11.

Recent financial reports further boost the bank’s strong standing. Last week, Bank of America posted a second-quarter earnings per share (EPS) of $0.83, surpassing the expected $0.80. Its revenue also beat projections, reaching $25.54 billion against an estimate of $25.22 billion. In this quarter, the bank returned $5.4 billion to its shareholders, through both dividends and stock buybacks. Overall, BAC shares are up 0.50% in premarket trading, reflecting a somewhat bullish sentiment among investors following these announcements.