Shareholders in Bank of America (BAC 3.72%) could get very good news over the next few weeks. On March 26, the Federal Reserve is expected to release the results of its 2014 Comprehensive Capital Analysis and Review, which dictates whether the nation's largest banks can increase dividends and share buybacks.
In last year's test, Bank of America decided against seeking permission to up its quarterly payout. It chose instead to increase repurchases of common and preferred stock. At the time, the bank intimated that its earnings stream wasn't consistent enough to warrant a dividend hike.
The story is now different. Bank of America has more than enough capital to fund a higher payout without dipping below the regulatory requirements. In addition, its earnings are much healthier and predictable. It's for these reasons that analysts predict the Charlotte-based lender may have asked to double or quadruple its dividend this year.
