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Fundamental analysis: Bank of America Corporation (BAC)

Awarener score: 8.3

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Superb) and growth (Poor), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.5

  • Business has been shrinking. It's been weak when measured against peer companies.
  • Bank of America Corporation business trend is extremely stable, which is best. It looks somewhat better than rivals.

Margins score: 7.2

  • BAC profit margins -on goods and services sold- are usually destitute. They stand mediocre against rival companies.
  • Business profit on sales tends to be meagre. It's similar to competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually excellent. They remain in good shape compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be huge in relation to total revenues. They're still well ranked against similar companies.
  • Profits -before income taxes- are usually excellent considering total sales, and remain more than average in relation to rivals.
  • Total net profit tends to be huge when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 3.0

  • Bank of America Corporation has an unknown gross margin growth, as there is not enough data to analyze. It's been impossible to compare to competitors.
  • There is not sufficient data to estimate the operating income margin trend, which has been therefore unknown against comparable firms.
  • Profits -available to repay debt and purchase properties- tended to shrink, which compares substantially worse when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- tended to shrink. It turns to be in a very weak position compared to similar stocks.
  • In past years, growth on profits -before income taxes- was almost stagnant. It was somewhat worse than rivals.
  • In the previous years, growth on total net profit has been almost null, and similar to peer companies.
  • Earnings per share have grown at a low rhythm in past years. It's been a slight improvement compared to industry peers.

Miscellaneous score: 8.0

  • BAC managed to pay little to no income taxes on profits made in the past years. It's been somewhat worse than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 6.0

  • Bank of America Corporation usually gets hardly sufficient returns on the resources it controls. It proves almost average when measured against peer firms.
  • The company normally gets good proceeds -on the resources directly invested in the business-. They remain rather normal in relation to similar companies.
  • Profitability -in relation to owned resources- is usually quite good. It ranks similar to competitors.
  • In the past, got barely sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's almost average when measured against comparable enterprises.

Usage of Funds score: 7.1

  • BAC usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands almost average when measured against rival firms.
  • The company is usually not replacing property, plant, and equipment that gets old, instead using funds in something else. It can't keep forever, which is last-in-rank when measured against industry peers.
  • In the past twelve months it paid good dividends, considering the current stock price. It came slightly better than competitors.
  • Has somewhat increased dividend payments in the past years. Business prospects may have improved. The company has behaved lacking compared to similar firms.
  • Dividend payments usually represent a minor portion of genuine funds generation and are most likely safe. Sustainability looks bottom tier against comparable companies.
  • The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains in good shape compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in a weak position compared to rivals.
  • The company uses a modest portion of genuine fund generation to reward investors, which can probably be sustained. It still looks last-in-rank when measured against competitors.

Balance Sheet score: 5.6

  • Bank of America Corporation intangible assets (like brands and goodwill) represent a modest portion of resources controlled, according to accounting books. There could be some difficulties in liquidating them if the company ever gets in financial distress. It happens to be substantially worse when measured against peer companies.
  • Current ratio remains a mystery, as there was not sufficient Balance Sheet information. It turns to be unidentifiable against similar firms.
  • A very minor portion of resources controlled were provided for with financial debt. Financial strength is solid. Company could increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains mediocre against rival firms.
  • Controlled resources might be only very slowly turned into cash and equivalents, which is riskier. It looks almost average when measured against rivals.
  • Quick ratio is unavailable at this moment, due to lacking data. It's a pity we cannot compare it with peer firms.
  • A conclusion on cash ratio could not be reached, as we lack inputs, which is unfortunate when trying to measure against similar enterprises.
  • Usually, sales are mostly on cash. It still ranks weak when measured against peers.
  • Days of inventory outstanding are not known. It comes up as a big question mark against competitors.
  • We could not gauge the normal operating cycle of the company. It happens to be a mystery against peers.
  • Unfortunately, we had not enough data to estimate the days of payables outstanding. It ranks unknown against industry peers.
  • Cash conversion cycle remains unknown, due to not having enough inputs. It's incomparable against similar companies.
  • Company earns net interest income on its investments and therefore is in a quite comfortable financial position. It stands top-notch against rival firms.
  • Business earnings have usually been very low when measured against loans taken. Even significantly cutting back reinvesting in the business, it could take more than ten years to repay the obligations with current profitability. It ranks weak when measured against comparable enterprises.
  • Revenues are quite good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks lacking compared to similar firms.
  • Resources exploitation is virtually zero, as the firm hardly reports any sales. It's still worse than most peer companies.

Valuation score: 7.8

  • Bank of America Corporation has an unknown adjusted Price-to-Earnings ratio, so we cannot comment on that. It happens to be a necessary comparison against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains lacking compared to peers.
  • There is insufficient information on the genuine funds generation capability showed in the past twelve months, which stands as an incognita in relation to similar companies.
  • Unfortunately, lack of enough yearly data impaired our ability to estimate the normal earnings power. It's still an unknown variable to measure against industry firms.
  • In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up in good shape compared to peer ventures.
  • We are unsure on the relationship between net financial position and market capitalization of the stock. It looks we will not be able to reach a conclusion regarding similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation looks cheap. Possible reasons are that the market might be betting current earnings will be hard to sustain through time, or that the company has very high fund needs, or a weak financial position, among others. If that isn't the case, the current stock price might be attractive. It ranks almost average when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a high relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
  • The relation between the stock price and accounting book value might be more than reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains slightly better than peer firms.
  • We could not gauge an alternative metric of earnings power of the past twelve months. It happens to be an interesting metric to relate to industry peers.
  • An alternate metric on the usual genuine-funds generation ability could not be provided. It's still unknown against peer companies.

Total score: 6.4


BAC logos

Company at a glance: Bank of America Corporation (BAC)

Sector, industry: Financial Services, Banks—Diversified

Market Cap: 260.25 billions

Revenues TTM: 92.48 billions

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. Its Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, noninterest-and interest-bearing checking accounts, and investment accounts and products; and credit and debit cards, residential mortgages, and home equity loans, as well as direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The company's Global Wealth & Investment Management segment offers investment management, brokerage, banking, and trust and retirement products and services; and wealth management solutions, as well as customized solutions, including specialty asset management services. Its Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options and merchant services; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The company's Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. As of December 31, 2021, it served approximately 67 million consumer and small business clients with approximately 4,200 retail financial centers; approximately 16,000 ATMs; and digital banking platforms with approximately 41 million active users. The company was founded in 1784 and is based in Charlotte, North Carolina.

Awarener score: 8.3

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Superb) and growth (Poor), and the company's inclination to return cash to the stockholders (Superb).