My Current Effective Dividend Yield: Bank of America
- 8 Comment
 |
The second post in my effective dividend yield series presents the current yield I am receiving on my Bank of America holdings. I keep track of this data for each of my holdings and have created a sidebar section (look to the right) that will list each stock in my portfolio where you can see what I am currently yielding. For a description of what I mean by my current effective dividend yield, please see the General Electric post.
Business Summary:
The Company through its subsidiaries, provide banking & nonbanking financial services and products through three business segments: Global Consumer and Small Business Banking, Global Corporate & Investment Banking & Global Wealth & Investment Management.
My Dividend Yield Data
| Bank of America | ||||
|---|---|---|---|---|
| Original Yield | ||||
| Date | Ticker | Initial Buy Price | Initial Div Per Year | Initial Yield |
| February 9, 2006 | BAC | $43.44 | $2.00 | 4.6% |
| Current Yield | ||||
| Average Price Per Share | Shares | Current Div Per Share | Current Yield | Annual Div’s Rec’d |
| $43.77 | 16.8774 | $2.56 | 5.85% | $43.21 |
Table Explanation:
The table is dividend into two sections: Original Yield and Current Yield. Original yield presents the data from my initial purchase in the security and the resulting yield. The Current Yield is the yield I am receiving on my investment, given the growth in dividends as well as reinvested dividends. As I receive dividends they are reinvested into additional shares which is factored into this calculation. Essentially, I calculate the average share price for all shares and use this price to calculate the current yield (Current Yield = Current Dividend / Average Share Price).
8 Comments on this post
Trackbacks
-
moneygardener said:
The trouble with your yield on cost is that you can currently buy Bank of America (BAC) and get a 7.0% yield. In the long term your yield on cost should be above the current yield, but in this case obviously you would have been much better off buying BAC now. The exchange rate only amplifies this discrepency.
March 8th, 2008 at 11:22 am -
NoBoB said:
>
His initial purchase was three years ago. Feel free to post a list of the dividend paying stocks we should *not* buy now because they’ll be cheaper and higher-yielding in 2011.
Unless you’re Biff and this is Marty McFly’s blog, you’re not going to be able to do that.
March 8th, 2008 at 10:18 pm -
passive income said:
Hello,
This is one of the aspect that I am never able to find a right answer. Although the YOC increases over a period of time, the actual value of the equity holding has reduced to an extend far below the return from dividends !!. So what is the point of increase in YOC when decrease is equity is much faster. My approach to this is: patience and trusting my analytical judgement and keep reassessing company’s SWAT. If I still like the stock, I buy, and this helps reduce the cost basis. If not, then wait for sometime before parting ways.March 9th, 2008 at 11:07 am -
moneygardener said:
NoBoB, Wasn’t it Marty that travelled back to the future, not Biff..if I was a future-teller i would be Marty and this would be Biff’s blog…
Anyway, my point was not that I am a fortune teller, it was that BAC is an example right now of a stock that The Dividend Guy holds where his YOC has not actually caught up to the yield that the stock is offering today; therefore he would have been better of buying the stock today…of course hindsight is 20/20. I hold several stocks where my YOC is lower than the current yield. This scenario should just tell dividend growth investors to buy more of that particular stock if they feel that the long term outlook has not changed.
March 9th, 2008 at 11:31 am -
NoBoB said:
Didn’t Biff end up with the almanac from the future, allowing him to bet — and win — on things he knew would happen? Anyway…
If your outlook hasn’t changed, I’d think concern with the current yield just muddies the situation, other than, in this case, knowing that your reinvestments are being made at an even more attractive yield than you’re getting on your original shares, which isn’t “normal”. Once you’ve taken the position, what you ‘could’ve done’ is just a pointless exercise.
You make a good point with the idea that it identifies ‘on sale’ stocks. Those of us that don’t automatically reinvest can use that info to help choose where to deploy the cash received from the entire portfolio.
And we don’t even have to worry about a flux capacitor
March 10th, 2008 at 1:28 am -
Writer's Coin said:
I just dipped my toes into BAC last week after thinking/writing about it for a long time.
March 10th, 2008 at 5:30 am -
moneygardener said:
NoBob, Agreed. BTW, BAC does seem attractive at these levels if they don’t cut the dividend. I for one think their acquisition of CFC will turn out to be genious long term, but may hurt short to mid term. BAC’s yield is very attractive if they do not cut. I like BAC’s long term prospects better than BMO’s.
March 10th, 2008 at 6:44 am
[...] Bank of America by the Dividend Guy [...]