Once again, Warren Buffett is making big news today with another big deal. Following his own advice about being greedy when others are fearful, Warren Buffett just made a big investment in Bank of America. The deal, worth about $5 billion, is in the form of BAC preferred stock. In 2008, Warren Buffett made a similar deal with Goldman Sachs just after Lehman Brothers went down.
While BAC hasn’t been approved to begin paying dividends to shareholders of common stock yet, the embattled bank recently authorized a dividend payment to those holding preferred stock. As a result, it is likely that Buffett will see some of his investment come back to him. And, of course, if Bank of America manages to recover, Buffett stands to see a rather substantial return.
Preferred Shares in Banks Can Offer Decent Yields
Instead of focusing only on common shares of banks, it might be worth it look into preferred bank shares. Dividends on common shares of most bank stocks are quite low, even though this past year has some dividend increases. Preferred shares, though, offer better yields, as we have seen with BAC. If you are interested in chasing some higher yields, preferred shared might offer some possibilities.
Other Dividend News: MOCO, GKSR, MO
Other dividends have been announced in the past week. MOCON’s (MOCO) board of directors just announced a quarterly cash dividend of 10 cents per share. Additionally, G&K (GKSR) Services announced that it is boosting its payout to 13 cents a share, and Altria Group (MO), parent of Philip Morris, is raising its dividend to 41 cents a share.
Additionally, a few stocks are going ex-dividend on Monday. Some of the companies that are planning to go ex-dividend on Monday include Time Warner Cable (TWC), Barrick Gold Corporation (ABX), and Hugoton Royalty (HGT).
It looks like there should be plenty of interesting opportunities available to dividend investors for quite some time.