U.S. Banks’ Shaky Payouts

Regions Financial, Alabama’s biggest bank, is the most obvious candidate for a dividend cut. The company’s quarterly payout rate, 38 cents a share, was equivalent to 13.3 percent of yesterday’s close. Only KeyCorp and American Capital Strategies Ltd., an investment company, had higher yields in the S&P 500.

It’s possible that the bank may match KeyCorp’s 50 percent reduction, according to a Bloomberg analysis based on earnings, cash flow, debt and other criteria.

Then again, any dividend cut would surely be traumatic for Regions Financial, based in Birmingham, Alabama. The bank is in the S&P 500 Dividend Aristocrats Index, a gauge of companies that have raised payouts for at least 25 years in a row.

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Original post by yielder

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