Market value: $42.5 billion
Dividend yield: 1.9%
BB&T Corp. (BBT, $54.67) is a large regional bank headquartered in Winston-Salem, North Carolina. Many of this bank’s deposits come from rural areas, where there is less competition and BB&T can offer lower rates. Analysts at Bank of America/Merrill Lynch expect the company’s efficiency ratio to improve, boosting margins.
Another reason for optimism is the company’s excellent management team. A testimony to the C-suite’s skills is that during the depths of the Great Recession, BB&T never reported a quarterly loss.
To be fair, the company does have a blemish on its dividend history, which dates back to 1995. That is, during the downturn, it reduced its payout from 47 cents quarterly to just 15 cents. However, it began re-establishing growth in 2016 and has now more than doubled the payout to its current 33 cents. Better still, it recently announced a 4.5-cent-per-share special dividend payable March 20.
BB&T appears to be re-committed to sharing its cash. That, combined with the benefit of higher interest rates, should serve BBT shareholders well.
