Can Morgan Stanley Support Its Dividend?

Last year, Morgan Stanley (NYSE: MS) hiked its quarterly dividend by a huge amount, increasing it 100% to $0.70 per share. On the second-quarter 2021 earnings call, CEO James Gorman explained the decision:

We made this decision because of the confidence we have in our business model and our performance over the past three Federal Reserve stress test[s]. These tests confirmed what we've said for many years; Morgan Stanley has built a significant amount of excess capital and we have the ability to invest in our business, do acquisitions, maintained a very healthy dividend yield, and increase our buyback.

Last year was a record-setter for Morgan Stanley as it posted $59.8 billion in revenue and $15 billion in net income. Its institutional securities business, which includes investment banking, led the way with record revenue, while its wealth management and investment management arms also saw revenue soar. The company closed on two major acquisitions, E*Trade and money manager Eaton Vance, and was well-capitalized with a common equity tier 1 (CET1) ratio of 16%.

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Source Fool.com