Analyzing Bank of America (BAC) & Baylake (BYLK)

Bank of America (NYSE: BAC) and Baylake (NASDAQ:BYLK) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Insider & Institutional Ownership

68.4% of Bank of America shares are owned by institutional investors. 0.2% of Bank of America shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Bank of America and Baylake, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of America 1 8 23 2 2.76
Baylake 0 0 0 0 N/A

Bank of America currently has a consensus target price of $26.45, indicating a potential downside of 11.49%. Given Bank of America’s higher possible upside, equities research analysts clearly believe Bank of America is more favorable than Baylake.

Profitability

This table compares Bank of America and Baylake’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of America 20.66% 8.33% 0.91%
Baylake 10.34% 4.05% 0.43%

Volatility & Risk

Bank of America has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Baylake has a beta of 3.79, indicating that its share price is 279% more volatile than the S&P 500.

Earnings and Valuation

This table compares Bank of America and Baylake’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of America $93.66 billion 3.33 $17.91 billion $1.72 17.37
Baylake N/A N/A N/A $0.85 20.51

Bank of America has higher revenue and earnings than Baylake. Bank of America is trading at a lower price-to-earnings ratio than Baylake, indicating that it is currently the more affordable of the two stocks.

Dividends

Bank of America pays an annual dividend of $0.48 per share and has a dividend yield of 1.6%. Baylake pays an annual dividend of $0.36 per share and has a dividend yield of 2.1%. Bank of America pays out 27.9% of its earnings in the form of a dividend. Baylake pays out 42.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bank of America has raised its dividend for 3 consecutive years.

Summary

Bank of America beats Baylake on 12 of the 15 factors compared between the two stocks.

About Bank of America

Bank of America Corporation is a bank holding company and a financial holding company. The Company is a financial institution, serving individual consumers and others with a range of banking, investing, asset management and other financial and risk management products and services. The Company, through its banking and various non-bank subsidiaries, throughout the United States and in international markets, provides a range of banking and non-bank financial services and products through four business segments: Consumer Banking, which comprises Deposits and Consumer Lending; Global Wealth & Investment Management, which consists of two primary businesses: Merrill Lynch Global Wealth Management and U.S. Trust, Bank of America Private Wealth Management; Global Banking, which provides a range of lending-related products and services; Global Markets, which offers sales and trading services, and All Other, which consists of equity investments, residual expense allocations and other.

About Baylake

Baylake Corp. is a bank holding company. The Company’s primary activities consists of holding the stock of its subsidiary bank, Baylake Bank (the Bank), and providing a range of banking and related business activities through the Bank and its other subsidiaries. The Bank is an independent community bank offering a range of financial services primarily to small businesses and individuals located in its market area. The Bank provides a range of loan, deposit and other banking products and services to its business, individual or retail and municipal customers, which include safe deposit box services, personal and corporate trust services, treasury management, private banking, financial planning and electronic banking services, including mobile banking and eBanc, an Internet banking product for its customers. It offers investment advisory services through Admiral Asset Management, Inc. (Admiral). The Bank conducts its community banking business through over 20 service financial centers.

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