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It has been some time since U.S. financial stocks have been associated with dividend increases and share buybacks, despite selective boosts last year. But the drought could come to an end this year – and in a big way, according to analysts at Credit Suisse (via Deal Journal and Abnormal Returns).

They noted that dividends and share buybacks averaged just 23 per cent of earnings last year. However, the payout ratio could more than double in 2012, to 47 per cent, with American Express Co. , State Street Corp. , U.S. Bancorp , J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. among the best-positioned to increase their payouts.

That's a big jump, and it follows what should be upbeat results to Federal Reserve stress tests, with Credit Suisse analysts expecting all banks to pass.

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That said, there are still reasons to be skeptical of the promise of big increases to payouts. For one thing, Bank of America Corp. had stated very publicly last year that it was moving to hand over a larger swath of its income to investors – only for the Federal Reserve to put the kibosh on such plans.

And for another, analysts expect the majority of payout increases this year to come in the form of share buybacks rather than dividends. Buybacks are considered by many investors to be inferior to dividends because companies have a tendency to buy their shares at high prices. Lo-and-behold, U.S. financials have been among the strongest performers this year.

At least buybacks have one good thing going for them: Buyback plans can easily be shelved in the event of financial turmoil, whereas the promise of dividends is far more difficult to back out of. For now, it seems, U.S. banks are going to play it safe.

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