Bank of America Corp (BAC.PL) stock analysis

P/E below its 5-year median

Bank of America's P/E of 11.9 is below its own 5-year median of 12.8.

P/E below the industry

Bank of America's P/E of 11.9 is below the Commercial Banks median of 12.3.

P/S below the industry

Bank of America's price-to-sales of 2.91 is below the Commercial Banks median of 3.64.

P/B below the industry

Bank of America's price-to-book of 1.18 is below the Commercial Banks median of 1.27.

Trading below fair value

The share price of $50.01 is below our fair value estimate of $51.52.

Margin of safety under 20%

The price is 2.9% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 6.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 6.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 9.8% over the last twelve months, against a 5-year average of 11.3% a year.

Growing slower than the industry

Revenue grew 5.4% over the last twelve months; the Commercial Banks median is 11.4%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 10.8% over the last twelve months and averaged 10.1% over five years; we look for 15% on both.

Return on assets under 1%

Return on assets was 0.9%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Bank of America's return on equity of 10.8% is below the Commercial Banks median of 11.2%.

Earnings grew over 5 years

Net income grew 11.3% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 26.8% over the last twelve months, against a 5-year average of 28.6%.

Net margin below the industry

Bank of America's net margin of 26.8% is below the Commercial Banks median of 30.0%.

Well capitalized

Equity is 8.7% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 60.7% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.1% of loans; we look for at least 1%.

High cost base

Non-interest expense takes 61.9% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 1.8% over the past year.

Borrowings

Needs debt and equity figures.

Pays a dividend

Bank of America paid dividends worth 2.3% of the share price over the last twelve months.

Yield below Treasuries

The 2.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 4.0% or more; Bank of America yields 2.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.