On Thursday, The PNC Financial Services Group Inc. (PNC) enhanced its quarterly common stock dividend by 10% to 44 cents per share. The dividend will be paid on May 5, 2013, payable the next business day, to shareholders of record as of Apr 16, 2013.
This reflects the company’s commitment to return value to shareholders with its strong cash generation capabilities. Prior to this, the company increased its dividend by 14% (from 35 cents to 40 cents per share) in Apr 2012.
The dividend increase is part of PNC Financial’s 2013 Capital Plan. The company’s capital plan, including the dividend hike and other capital actions were submitted to the Federal Reserve in Jan 2013 as part of the Comprehensive Capital Analysis and Review (CCARF) process. Having received no objection to its capital plan from the Fed, the company increased its quarterly dividend.
In 2012, PNC Financial repurchased $190 million worth of common shares and paid $820 million as common stock dividends. Cash and due from banks exiting the year were $5.2 billion.
We believe that PNC Financial is well positioned to grow given its diverse revenue mix, balance sheet strengthening efforts, strategic acquisitions and solid capital levels. Capital deployment activities also serve as positive catalysts. Yet, a tepid economic recovery with a continued low interest rate environment and increased regulatory headwinds are our concerns.
PNC Financial currently carries a Zacks Rank #3 (Hold). Among other banks, Fifth Third Bancorp (FITB), Wells Fargo & Company (WFC) and First Horizon National Corporation (FHN) recently increased their capital redeploying efforts through dividend hikes.
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