With a new quarterly dividend of 35 cents a share, PNC Financial Services Group Inc. will have a shareholder payout rate that is higher than most large banks.
Based on net income estimates for 2011, the Pittsburgh company will distribute about 25% of earnings to shareholders. "This compares to an average 20% dividend payout across the other banks that were part of the recently completed" Comprehensive Capital Analysis and Review program conducted by the Federal Reserve, Evercore Partners analyst Andrew Marquardt wrote in a note to clients.
PNC said Thursday its board agreed to raise the dividend 250% from the prior quarterly dividend of 10 cents a share. The increased dividend will be payable May 5 to shareholders of record on April 18. U.S. Bancorp, PNC's closest rival in terms of asset size, increased its dividend 150% last month, to 12.5 cents a share.
The board also reinitiated stock repurchases under an existing buyback authorization, saying it will repurchase $500 million of stock between now and the end of the year. That implies a buyback of about 8 million shares, which is lighter than the 20 million that Marquardt had been expecting for the year. U.S. Bancorp last month authorized a 50 million share repurchase program.
