BAC Dividend

9 replies [Last post]
Spaceman Spiff's picture
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Joined: 2006-08-08

How about we have a serious discussion for a change. 
I'm curious what you folks are doing with BAC.  Do you believe the dividend is going to be cut?  If so, what do you tell your existing shareholders, if you have any left?
 
I've never seen a stock with such a wide range of opinions.  Jones has it in the Model Portfolio, but they say the dividend is going to be cut.  S&P has a strong sell, believes that the dividend is going to be cut, and has a $19 target price.   Yahoo Finance says the group consensus is hold with an mean target price of $34.  I read news report that said that Goldman had lunch with Ken Lewis and he said they don't believe they are going to have to cut the dividend for capital.
 
So, what say the brightest minds in the biz?

now_indy's picture
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Joined: 2006-07-28
B24's picture
B24
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Joined: 2008-07-08

I actually wired the equity analyst a few weeks ago about BAC. That was the exact question I asked them - how could you have a BUY on it, when you are talking about cutting the dividend. To make a long story short, he said typically a company is not going to support a dividend at that yield, but that the fundamentals were still very sound. He also said you have to look at them versus their peers, not necessarily against other companies. So in other words, if you are going top buy a bank stock, BAC would be one of them, as the current price, even with a dividend cut, would still be attractive long-term. The way I look at it, if you buy it now, even at a 4.5% yield (I'm just throwing this out as the yield after a dividend cut), it would be an attractive buy.

But I wouldn't be buying financials right now unless I were REAL sure there are no skeletons.

doberman's picture
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Joined: 2005-02-22

Why take the chance to be embarrassed? Aren't there other more worthy investments? Unless you call the client and tell him/her that by holding BAC they're just rolling the dice, sell it!
 
It's one thing to be surprised by "out of the blue" catastrophic news that sinks a good stock. But with all the known cr*p associated with BAC, why take the chance, unless the client wants to roll the dice and see what happens. If they do, get their desires in writing and signed by the account holders. Of course, eventually, you'll still have to hire an attorney and show-up in arbitration when BAC bombs, but maybe, just maybe you'll win...
 
So, is it still worth holding?

troll's picture
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Joined: 2004-11-29

What am i missing? The stock yields 11%. But the CEO says no divi cut/ The maket is telling us the dividend is about to be cut in half.
So the interesting question to vote on is this: who do you believe, Mr Market, or the CEO of a public company.
For that matter a public company that has agreed to buy Countrywide!
I vote for Mr. Market

doberman's picture
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Joined: 2005-02-22

pratoman wrote:
So the interesting question to vote on is this: who do you believe, Mr Market, or the CEO of a public company.
For that matter a public company that has agreed to buy Countrywide!
I vote for Mr. Market
 
I vote for Mr. Market, as well!

now_indy's picture
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Joined: 2006-07-28

Didn't the head of Bear Stearns say that the company was fine about a week or two before they imploded?

B24's picture
B24
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Joined: 2008-07-08

I vote for Mr. Market and our analysts who agree that the dividend will be cut.
 
Enron also said the company was fine.  NEVER believe what the company says. 

snaggletooth's picture
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Joined: 2007-07-13

B24 wrote:I vote for Mr. Market and our analysts who agree that the dividend will be cut.
 
Enron also said the company was fine.  NEVER believe what the company says. 
 
I heard from my local teller that everything will be fine.  I have to believe she knows what she's talking about and probably has some sort of inside track.

Eyetattoo's picture
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Joined: 2008-03-29

Do you really feel that comparing BAC to Bear Stearns and Enron is a fair comparison?  Sure the company is getting hit hard right now but I find it hard to believe they are about to implode.  Doesn't mean I am suggesting a buy right now but why sell when its down nearly 60%?  Now Wachovia and Washington Mutual is a different story..........

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