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This Top Bank Stock Just Hiked Its Payouts by 9%

Last week, Bank of America (NYSE:BAC) announced that it would be raising its dividend by two cents, up to $0.24. While that may appear modest, it amounts to a 9% boost for shareholders. With the increase in the dividend, Bank of America's yield is now up to around 3.4%, which is more than double the S&P 500 average of less than 1.6%. If you want to collect $1,000 in annual dividends from the top bank stock, you would need to invest approximately $29,500 – far less than the roughly $64,000 you would need with the average S&P stock.

The consensus analyst price target for Bank of America stock is over $36, which implies that investors who buy and hold the stock for the next year or so could earn a return of around 28%. That along with a high-yielding dividend could make this an attractive stock to buy right now.

While the risk of a recession hasn't disappeared, Bank of America is a top bank and likely to get through whatever adversity comes its way. Although bank stocks haven't been hot buys this year due to multiple bank failures, Bank of America is not a stock that investors need to worry about.

Trading at only eight times its estimated future profits, the stock provides some good value at its current price point. Year to date, it is down around 14% but over the past decade it has been a reliable stock to own, rising around 120%. And when you include its dividend, its total returns are close to 160%.