Stress Test Results Could Lead to Dividend Cuts -- Should Bank Investors Worry?

The Federal Reserve recently released the results of 2020 bank stress tests, and while no banks are in serious danger, some would see capital levels fall a bit too low for comfort in a prolonged and deep COVID-19 recession. As a result, the Fed issued a formula to govern bank dividends, and there's a real chance bank investors could see dividend cuts from some major financial institutions.

In this episode of Industry Focus: Financials, host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss the news and what it could mean for bank investors. Plus, Moser and Frankel answer a listener's excellent question on position size and share why they're watching Wells Fargo (NYSE: WFC) and American Express (NYSE: AXP) this week.

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Source Fool.com