"W. Wells" wrote Some comments on the basics:
I am doubtful bank's financial records are transparent enough to say much other than, if you buy BAC or any other bank (with at least ostensibly decent fundamentals, insofar as these can be gleaned), plan on holding for the long run.
Note that BAC's dividend payout ratio exceeds 100%. On the other hand, NYB (a much smaller bank with arguably a different focus) has had a DPR exceeding 100% for a couple years now, said a couple years ago it would not slash dividends, and has not.
Washington Mutual slashed its dividend in December and then slashed it again to nearly 0 a few months later. Many Citigroup officials said a dividend cut was unlikely, then the C Board cut the dividend.
I'd say it's a good sign that BAC may be buying Countrywide.
I would review the period from about 1990-1991 concerning dividend cuts and banks folding, since IMO there are parallels to today. The typical large bank's dividends and share price recovered.
There's a reason banks historically trade at lower P/Es than the S&P. Namely, risk.
OTOH, many of the observations above use numerology. I'd say if one feels compelled to hold BAC, buy a small position, well south of 5% of your total portfolio, and reinvest dividends while the share price seems low.
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