Bread Financial Raises Dividend 8.7% to $0.25

Bread Financial Holdings, Inc. increased its quarterly common dividend to $0.25 a share from $0.23, an 8.7% raise. BFH shares have a next ex-dividend date of November 30, 2026, and the payment is scheduled for December 15, 2026. The new rate equals an annual dividend of $1.00 a share.

Why the dividend changed

Bread Financial tied the increase to its earnings strength and approach to capital management. Chief Financial Officer Perry Beberman said the board’s decision was supported by earnings and disciplined capital allocation, while Chief Executive Officer Ralph Andretta said the higher dividend and share repurchases reflected confidence in the business model and long-term financial outlook. The company repurchased $75 million of common stock during the third quarter. Bread Financial’s third-quarter earnings release

The increase followed a quarter of loan and revenue growth with improving credit indicators. Third-quarter revenue rose 5% from a year earlier to $1.017 billion, while pretax income increased 6% to $209 million. Net income fell 17% to $156 million because the prior-year period included a favorable tax item. Average loans grew 6%, and consumer deposits increased 21% to $9.9 billion. Bread Financial’s third-quarter results presentation

Credit trends also strengthened the context for the decision. The delinquency rate declined to 5.57% from 6.04%, and the net loss rate fell to 6.40% from 7.39%. Bread Financial improved its full-year net loss-rate outlook to below 7.0%, while forecasting average-loan growth of approximately 4% and revenue growth of approximately 5%. Bread Financial’s third-quarter earnings release

The company completed its bank merger on October 1, expanding its funding flexibility through a larger, simplified bank structure. It also received a Moody’s ratings upgrade and renewed long-term agreements with Signet Jewelers and Sephora, two of its top 10 partners. Those developments support the company’s strategy of pairing loan growth with more consumer-deposit funding and continued capital returns. Bread Financial’s third-quarter results presentation

Dividend track record

The latest increase extends a recovery that followed a substantial reduction. Bread Financial’s last annual cut occurred in 2020. The full-year total subsequently fell 29.1% to $0.71 in 2021 from $1.01 in 2020, then rose 17.8% to $0.84 in 2022. Annual payments remained unchanged at $0.84 in both 2023 and 2024 before increasing 2.4% to $0.86 in 2025.

Quarterly payments stayed at $0.21 through August 8, 2025, before rising to $0.23 on November 7, 2025. Bread Financial then maintained the $0.23 rate for the first three payments of 2026. The new $0.25 rate establishes an annualized total of $1.00, still slightly below the $1.01 paid in 2020.

The company has 1 consecutive year of dividend growth, and its five-year record is 4.6% annual growth. The pattern is one of gradual rebuilding after the earlier cut, rather than a long, uninterrupted record of annual increases.

Is the dividend covered?

The dividend consumes 7% of earnings, leaving a substantial earnings buffer after common-dividend payments. SmarterDividends gives the dividend a safety score of 68 and a grade of B, placing it in the safe range of 66-79.

The grade indicates that current earnings provide solid coverage, though the dividend is not in the highest safety tier. For a credit-card lender, future coverage also depends on loan losses, delinquencies, funding costs and consumer credit conditions. Recent improvement in the company’s credit metrics supports the present coverage assessment.

Yield and valuation

Bread Financial’s forward yield is 0.98%, well below the Financial Services sector median of 5.84%. At the new rate, 100 shares produce $100.00 in annual dividend income. The stock’s 47.5% gain over the past year has limited the yield even as the quarterly payment increased.

At a share price of $102.61, SmarterDividends estimates fair value at $337.01 and classifies the shares as undervalued, representing 237% upside to that estimate. That valuation assessment is separate from the income profile: BFH offers a low current yield relative to its sector, paired with a low earnings payout ratio.

What to watch

The immediate calendar items are the November 30, 2026, ex-dividend date and the December 15, 2026, payment date. The next quarterly results will show whether Bread Financial finished the year in line with its updated expectations for loan growth, revenue and credit losses.

Credit quality remains central to dividend coverage. Investors can track the delinquency rate, net loss rate and loan-loss reserves, along with the deposit growth expected from the completed bank merger. Capital allocation is another focal point because the company is funding business investment, common-share repurchases and dividends from the same earnings and capital base.