Analyzing Bank of America (BAC) & Its Rivals

Bank of America (NYSE: BAC) is one of 305 publicly-traded companies in the “Banks” industry, but how does it contrast to its peers? We will compare Bank of America to similar businesses based on the strength of its earnings, valuation, profitability, dividends, institutional ownership, analyst recommendations and risk.

Earnings & Valuation

This table compares Bank of America and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Bank of America $93.66 billion $17.91 billion 17.23
Bank of America Competitors $5.50 billion $827.87 million 385.36

Bank of America has higher revenue and earnings than its peers. Bank of America is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Bank of America has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Bank of America’s peers have a beta of 0.79, suggesting that their average share price is 21% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Bank of America and its peers, 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
Bank of America Competitors 2192 8530 8552 337 2.36

Bank of America currently has a consensus price target of $26.45, suggesting a potential downside of 10.77%. As a group, “Banks” companies have a potential downside of 7.05%. Given Bank of America’s peers higher possible upside, analysts clearly believe Bank of America has less favorable growth aspects than its peers.

Insider & Institutional Ownership

68.4% of Bank of America shares are held by institutional investors. Comparatively, 52.1% of shares of all “Banks” companies are held by institutional investors. 0.2% of Bank of America shares are held by insiders. Comparatively, 10.4% of shares of all “Banks” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Bank of America and its peers’ 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%
Bank of America Competitors 18.76% 8.37% 0.94%

Dividends

Bank of America pays an annual dividend of $0.48 per share and has a dividend yield of 1.6%. Bank of America pays out 27.9% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 1.9% and pay out 34.9% of their earnings in the form of a dividend. Bank of America has increased its dividend for 3 consecutive years.

Summary

Bank of America beats its peers on 9 of the 15 factors compared.

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.

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