Bank Of America Corp Stock Quality Grade
|Return on Invested Capital||37|
|Change in Total Liabilities to Assets||49|
|Z Double Prime Bankruptcy Risk Score||33|
Like the Value Grade, AAIIs A+ Investor Quality Grade comes from the percentile rank of key metrics. Specifically, the Quality Grade is the percentile rank of the average of the percentile ranks of return on assets , return on invested capital , gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk score and F-Score. The score is variable, meaning it can consider all eight measures or, should any of the eight measures not be valid, the remaining measures that are valid. To be assigned a Quality Score, stocks must have a valid measure and corresponding ranking for at least four of the eight quality measures. The Quality Score is used to assess the underlying quality of a particular stock. A higher quality stock possesses traits associated with upside potential and reduced downside risk. Backtesting of the Quality Grade shows that stocks with higher grades, on average, outperformed stocks with lower grades over the period of 1998 through 2019. Stocks receive better grades for having higher scores for the quality subcomponents and worse grades for lower scores for the subcomponents. Bank of America Corp has a Quality Score of 59, which is Average.
Other Bank Of America Corp Stock Grades
In addition to Value, Growth and Quality, A+ Investor also provides grades for Momentum and Estimate Revisions and Momentum,Estimate Revisions.
The Momentum Grade helps uncover stocks experiencing anomalously high rates of return research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming. The Earnings Estimate Revisions Grade takes into account the magnitude of a companys earnings surprise in its last two reported fiscal quarters. Often, surprises beget further surprisesor at least continued sales growth . AAIIs stock screen that follows the companies with the highest earnings estimate revisions has a 23.3% backtested annual return since inception, whereas an example screen following those with the worst revisions has a backtested annual return since inception of under 5%. These 2 key factors, when combined with the above, provide a holistic view into a stock. Further, by joining A+ Investor you can see whether Bank of America Corps stock passes any of our 60+ stock screens that have outperformed the market since their creation.
Bank Of America Stock: Is It A Good Buy
Bank of America might not be the most exciting stock on Wall Street, but if you want to make money over the long run and believe in the bets made by the Oracle of Omaha himself, famed billionaire Warren Buffett then it might be just what youre looking for. Heres a quick rundown on why many analysts and investors alike are backing the second-largest bank in the United States.
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How Is Bac Performing As A Company
Last year, BAC earnings were $26.57B. During the last5year, BAC’s earnings have increased by 12.41% per year. This was slower than the Banks – Diversified industry average of 14.9%.
Last year, BAC revenue was $90.74B. In the last5year, BAC’s revenue has gone up by 0.92% per year. This was slower than the Banks – Diversified industry average of 5.26%.
You can analyzeBAC’s earnings and revenue performance here.
Are Bank Stocks A Good Buy Right Now
To be clear, I have absolutely no idea what the big bank stocks will do over the next few days, weeks, or months. I’d be willing to guess they’ll be volatile as the economic effects of the COVID-19 pandemic and recession continue to play out, but that’s it. As we’ve discussed here, several factors can affect bank profitability, and bank stock prices generally don’t move in a predictable manner over short periods.
Having said that, if you focus on quality banks that have a strong history of managing risks and generating profits, banks can be an excellent means of investing for the long term.
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How To Buy Bank Of America Shares In South Africa India And Uk
If you live in South Africa, India or the UK and think Bank of America is a great company, you might find it difficult to buy stock in the company without using Contract For Differences , or a financial arrangement made using financial derivatives that settle differences between open and closing trading prices with cash.
If you want to buy shares of Bank of America in South Africa, India or the UK without using CFDs, you can use a Firstrade account.
You simply need to setup your account, get it approved, fund it and find the stock within the app to buy.
Full list of available countries for Firstrade:
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Bank Of America Corp Stock Value Grade
Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection. To decide if Bank of America Corp stock is a buy or sell, youll want to evaluate its fair market price or intrinsic value. Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point. AAIIs A+ Investor Value Grade is derived from a stocks value score. The value score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid ratio and corresponding ranking for at least two of the six valuation ratios. Stocks with a Value Score from 0 to 20 are considered ultra expensive, those with a score between 21 and 40 are expensive and so on. Bank of America Corp has a Value Score of 38, which is Value.
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Bank Of America Stock Is A Buy
Warren Buffett is a big booster of Bank of America stock. It continues to be Berkshires second-largest equity holding valued at more than $33 billion. The Oracle of Omahas company owns 10.5% of its BAC stock. In October, Berkshire petitioned the Federal Reserve to be able to raise its stake above the 10% threshold.
While Buffett is unlikely to increase his stake beyond the approximately 948 million BAC shares Berkshire owns, it did send a signal to investors that Bank of America stock is a buy. Over the next three months, investors piled in.
However, I dont think you can underestimate the value of Buffetts endorsement. If Berkshire wasnt BACs largest shareholder and petitioning the Federal Reserve to keep it that way, I dont think you would have seen quite the same performance by the BAC stock price in the fourth quarter.
As for fundamentals and its actual business, InvestorPlaces Tom Taulli recently pointed out that the banks loan portfolio grew by 4.6% overall in the latest quarter with a 7% boost in commercial loans. As it continues to build out its team of regional bankers across the U.S., its loan business will continue to grow.
Furthermore, the banks making great strides with digital banking, which could provide higher retention of customers, in good times and bad.
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Argentinas Energy Secretary in 2002, and subsequently its World Bank representative.Alieto Guadagni has a doctorate in economics from the University of Chile. In 1991 he undertook the role of undersecretary of Production for Defense in the Ministry of Defense in Argentina, and consequently became secretary of International Economic Relations of the Ministry of Foreign Relations. In 1993, Guadagni was appointed an official ambassador of Brazil. He has worked as a consultant for international organisations such as the Inter-American Development Bank , the World Bank, the Organization of American States, and the United Nations, in addition to being a researcher at the Universidad Torcuato Di Tella.
Is Bank Of America Under
Valuing Bank of America stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Bank of America’s overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Bank of America’s P/E ratio
Bank of America’s current share price divided by its per-share earnings over a 12-month period gives a “trailing price/earnings ratio” of roughly 11x. In other words, Bank of America shares trade at around 11x recent earnings.
That’s relatively low compared to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 . The low P/E ratio could mean that investors are pessimistic about the outlook for the shares or simply that they’re under-valued.
Bank of America’s PEG ratio
Bank of America’s “price/earnings-to-growth ratio” can be calculated by dividing its P/E ratio by its growth to give 114.1509. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Bank of America’s future profitability. By accounting for growth, it could also help you if you’re comparing the share prices of multiple high-growth companies.
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Should You Buy Canadian Or Us Bank Stocks
Should you buy Bank of Nova Scotia or Bank of America Corp. right now?
Higher interest rates are good for banks because net interest margins widen as interest rates increase. Banks will be able to make more money from loans by getting higher interest than the interests the bank pays to, for example, our savings accounts.
The Bank of Canada and Federal Reserve affect short-term interest rates by hiking or reducing the overnight rate target or the federal funds rate target. In turn, large banks borrow and lend overnight funds to one another at the overnight rate.
The higher the rate the borrowing and lending rates, the higher the rate of other loans such as commercial loans, consumer loans, and mortgages will be.
Both Canada and the United States have been increasing interest rates. According to Trading Economics, the Bank of Canada has increased the overnight rate from 0.5% to 1.25% from late 2017 to May, and the Federal Reserve has increased the federal funds rate from 0.5% to 1.75-2% since 2016. The long-term average interest rate is almost 6% in both countries.
With a stable economy and interest rates still low, more interest rate hikes are expected.
Should you buy Canadian or U.S. banks?
Fool contributor Kay Ng owns shares of Bank of America and Scotiabank.
Bank Of America Target Price Raised By Wells Fargo
Today, Wells Fargo raised its target price on Bank of America stock to a street high of $66. We believe that BAC has understated upside in a rising rate environment, said Wells Fargo analyst Mike Mayo in its note.
He added, Cyclically, the rate backdrop helps BAC more than peers given $2 of mostly sticky, low-cost deposits that should help fund higher yielding securities and loans. He also believes that BAC is a leader among banks when it comes to tech adoption.
As fintech companies continue to snatch market share from traditional banks, they have been looking to increase their tech capabilities. Apart from making investments in tech, legacy financial companies have also been looking at acquisitions. Recently UBS had announced the acquisition of Wealthfront, an online wealth management focussing on US millennials.
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Interest Income Surges Higher
Bank of America’s solid earnings followed a lackluster earnings report from the nation’s largest bank, JPMorgan Chase, the previous week. Coupled with decent earnings reports from Goldman Sachs on Monday and Citigroup last Friday, there has been some good momentum in the overall market the past few days.
But let’s take a closer look at Bank of America’s earnings to see what it means longer term. The overall revenue increase was buoyed by a 12% year-over-year jump in revenue in the consumer banking business to $9.1 billion, and a 7% revenue increase in its wealth and investment management business to $5.4 billion. These gains offset losses in its global banking and global markets businesses.
Some good signs for Bank of America, the nation’s second-largest bank, are a 3% year-over-year increase in average loans and a 22% jump in net interest income to $12.4 billion. The loan growth signifies that despite inflation and economic concerns, loan activity hasn’t slowed, and the jump in net interest income is the direct result of rising interest rates.
Also, the bank lowered its efficiency ratio by 5 basis points to 54%, which means that it is spending less to earn a dollar of revenue.
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Bank Of America Is The Second
Berkshire Hathaway chairman Warren Buffett has a flair for banking and financial stocks. Buffett has long strived to keep the conglomerates holdings in banks below 10% to escape regulatory scrutiny. He sold bank shares whenever the holding was getting near 10%. However, he made an exception for Bank of America and increased the stake beyond 10%. According to the most recent filings, Berkshire Hathaway is the largest BAC shareholder and holds a 12.3% stake in the company. BAC is the second biggest holding for Berkshire Hathaway, just behind Apple.
Buffetts faith in BAC has paid of well and the conglomerate is sitting on massive profits on its investment. While Buffett has sold stakes in several banks like JPMorgan Chase and Wells Fargo, he continues to remain bullish on BAC.
Depending On The Undependable
Chief Executive Officer Brian Moynihan acknowledged that higher interest rates helped drive Bank of America’s strong second-quarter net interest income growth while allowing the company to “perform well in a weakened capital markets environment.” Investors should consider, though, that the current high-interest regime might be unique and, to borrow an abandoned term from Federal Reserve Chairman Jerome Powell, transitory.
Hearken back to late 2018, if you will, a simpler time when COVID-19 wasn’t a consideration and Powell dared to raise the federal funds rate — and, by extension, the 10-year Treasury yield — to its highest level in roughly five years. As you may recall, the stock market immediately had a taper tantrum and dove 20%. In response, the Fed quickly backed off and slashed interest rates, and all was calm in the financial markets once again.
History isn’t exactly repeating itself in mid-2022, though it certainly appears to be rhyming. This time around, the 10-year yield is up to 3% again and the stock market dropped 20% — but unlike in late 2018, there’s sky-high inflation to contend with in 2022. Of course, elevated inflation isn’t wonderful for big banks’ bottom lines as it doesn’t get customers in the mood to borrow money to make purchases. However, high inflation did prompt the Fed to hike interest rates, and this gave BoA a nice revenue boost in Q2.
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