Bank of America Pays Out $0.32 Per Share Each Quarter. Here's How Many Shares You'd Need for $1,000 a Year in Dividends.

In July, Bank of America (NYSE: BAC) raised its quarterly dividend by 14%, to $0.32 per share, or $1.28 annually. That gives it a decent yield of about 2.4%.

So, how many shares of the bank stock would you need to own to collect $1,000 a year in dividend income?

It's a straightforward calculation. $1,000 divided by $1.28 is 781.25. So that's the number of shares needed to generate that annual income amount. At the current price of $52.75 per share, acquiring that many shares would cost about $41,211. That's a lot of money to invest just for $1,000 a year in passive income.

Are there any other reasons it might be worth it to make this investment? Well, the stock is trading about 17.5% below its 52-week high. Given the company's history of growth, is this a good time to start building such a position in Bank of America stock?

Bank of America was hit this year by softer Wall Street revenue guidance, regulatory pressures, and macroeconomic concerns related to rising yields and interest rates. Like BofA, many bank stocks are down this year.

But Bank of America remains one of the world's largest financial companies, and offers investment banking and investment management along with its retail banking operations. It has a reputation for being one of the best-run banks in the world.

Keep in mind, too, that Bank of America has built a strong track record of annual dividend increases, now spanning about 13 years, so those dividends are likely -- though not guaranteed -- to continue increasing.

So, if you're looking for a solid dividend payer in the financial services sector with a lot of upside potential, this may be a good stock to own.

Bank of America is an advertising partner of Motley Fool Money. Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.