Wednesday, May 8, 2013

Bank of America shareholders want bigger dividend, better earnings power

While Bank of America's annual shareholders meeting Wednesday felt at times like a nonstop parade of coal industry critics, also in the audience were shareholders who had other concerns.

The Observer talked to some of those shareholders before the meeting at the Charlotte Marriott Center City hotel to see what brought them to the event and how they feel about the stock as an investment.

Below is what two of them told the newspaper:


Goozner, 67, who sat in the bank of the meeting room, said it was his first time attending a Bank of America shareholders meeting.

On the one hand, he had good things to say about the stock. On the other, he said he wished the quarterly dividend were higher than 1 cent per share. He said his octogenarian mother-in-law, who owns Bank of America shares, is in a retirement community and could especially use a higher dividend.

"My poor mother-in-law," he said. "She's a retired teacher. She's relying on, of course, Social Security, a pension from North Carolina. She also has some money with the teachers credit union. And that's going to be depleted, obviously. She's in her 80s. She's going to last longer than her money."

In March, the bank said it will repurchase up to $5 billion in common stock, rather than raise the dividend, after winning approval from the Federal Reserve for its capital plan.

"I want to see the bank raise their dividend," said Goozner, whose Bank of America investment includes 8,000 shares of common stock. He also said he owns shares of the bank's preferred stock.

Goozner said he'd like to see the dividend increased to about 6 cents a quarter.

"That would be a good base to start raising the dividend," he said.

He said some of his family members have sold their Bank of America shares. But he's been hanging on.

"The stock itself has been outperforming the market," he said. "I think it's definitely on the upside. I really see the risk-reward ratio highly favorable on the reward side right now."


Edwards, who drove into Charlotte from Missouri Tuesday night to attend the meeting, said he came to find out where Bank of America was headed.

He's a former hospice administrator who now works on a 200-acre family farm, which he plans to sell to focus on his consulting firm for hospices.

Edwards said he bought shares of Bank of America stock in 2010, 2011 and 2012. On his mind Wednesday: the litigation that has dogged the bank and reduced its earnings power.

"Earnings power, it's not where we'd like it to be, obviously, as a shareholder," he said. "The litigation ... that's affected the bottom line every quarter and has for several years."

"Frankly, if litigation was behind the company, it (the stock) would pop up to ... probably between tangible book and net book value. I still think it's undervalued."

Edwards said Moynihan has done as good job as CEO.

"He inherited a mess," he said.

For now, he said, he doesn't plan to by more Bank of America shares.

"I've got as much or more than I should have already. If the stock price gets a little higher, I'll probably lighten up over time to diversity a little bit more."