3 Bank Stocks to Buy That Raised Their Dividends at Least 14% This Year

When markets are uncertain, dividend stocks can be a wise investment. They often belong to large, stable companies that can handle market volatility, and they usually perform well during market downturns. Additionally, they offer dividend income that can be reinvested to boost total returns. Bank stocks, especially large ones, are among the top dividend stocks because banks are required to have enough capital to survive severe economic stress, making it more likely for them to maintain or increase dividends even in the worst markets.

Three major banks have raised their dividends by at least 14% this year: PNC Financial (PNC -0.80%), Morgan Stanley (MS -1.78%), and Bank of America (BAC -1.14%). However, PNC Financial stands out as the best option for several reasons. In the third quarter, PNC raised its dividend 18% to $2 per share, paying a high yield of 3.6% and having a streak of 15 consecutive dividend increases. The stock has performed well, with a 6% increase year-to-date and a 20% rise over the past year.

PNC's financial performance has been strong, with record revenue, fee income, and net interest income in Q2, showing a 21% jump in revenue to $6.9 billion and a 25% increase in earnings to $4.81 per share. The bank has also raised its outlook for 2026 revenue, loans, fee income, and net interest income. With a CET1 ratio of 9.9%, PNC has ample capital to maintain its dividend. Its payout ratio is a low and safe 37%, indicating it can continue raising dividends.

Morgan Stanley increased its dividend by 15% to $1.15 per share, with a yield of 2.4%, marking its 12th annual increase. The stock has seen significant growth, with a 7% increase this year and a 25% rise over the past 12 months. Morgan Stanley experienced record revenue in Q2, with earnings soaring 62% to $3.46 per share, driven by its institutional securities business. The bank has a generous CET1 ratio of 14.8% and a low payout ratio of 33%, giving it room to raise its dividend.

Bank of America raised its dividend 14% to $0.32 per share, paying a yield of 2.4% and having raised its payout for 12 consecutive years. The bank's revenue increased by 15% to $31.6 billion in Q2, while net interest income rose by 9%. Bank of America has a CET1 ratio of 11.8%, above the 10% minimum, and a low payout ratio of 25%, suggesting it can maintain its dividend easily.

Its forward price-to-earnings ratio is around 10, and 72% of Wall Street analysts rate PNC as a buy with a median price target of $273 per share, indicating a 24% upside potential.