JP Morgan wants to get back in the groove. With a clear sell recommendation from multiple analysts, the United States bank wants to return its dividend to attractive pre-Lehman levels. The bank announced that by mid-month it will raise its quarterly dividend by five cents to thirty cents per share. Analysts predict that the firm could continue to increase its dividend incrementally by the same rate over the course of the next two years, ultimately surpassing pre-crisis levels.
After having to cut shareholder payouts sharply (JP Morgan slashed dividends to as low as five cents in 2009-2010), last year brought improved earnings to the firm. Now JP Morgan has reconfirmed that it has strengthened its position in order to raise its dividend. According to Bloomberg predictions, analysts believe that it will offer 35-cent dividends in April 2013 and 40-cent dividends in the following year. So JP Morgan should successfully return to 2008 levels when dividends were 38-cents per share.
The approved increase, which caused JP Morgan shares to spike seven percent in a single session, will be paid on April 30. But investors interested in the dividend need to buy shares by April 4 in order to cash in on this quarterly distribution. The thirty cents JP Morgan is paying equate to 0.66% quarterly interest, or 2.65% annually.
In addition to the cash dividend, the bank will also approve a share buyback for 12 billion dollars that will occur this year and another 3 billion dollars for the first quarter of 2013.
