Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Bank Stocks/Bank of America
Old 12-30-2022, 02:49 AM   #1
Full time employment: Posting here.
 
Join Date: May 2019
Posts: 520
Bank Stocks/Bank of America

I was hoping to hear opinions on bank stocks - and amongst them, Bank of America.

Disclosure: I've held onto 70% of my original positions in regional banks like RF, andTFC(Trust -the old BBT). Certainly off their highs quite a bit - but with divs from 3.5-4.9, banks positions in growth areas, my (naive?) belief that regional banks know their clients a bit, and therefore make prudent loans I've held on. As someone whose goal is an annualized 5-6% nominal return - I felt this is a place to be.(Divs help my picture a lot due to tax advantages)

Bank of America.... I've pasted a few Barron's snippets in case paywall comes up:

https://www.barrons.com/articles/sto...=Searchresults

"The bank’s conservatism extends to its dividend, with an earnings payout ratio below some of its major rivals. The bank lends mainly to an affluent customer base that should hold up better in an economic slowdown. It’s getting a boost to margins from rising short-term rates. "


“Over my three decades following the industry, I’ve seldom seen the fundamentals improve the way they have at Bank of America and the stock perform so poorly,” says Wells Fargo Securities analyst Mike Mayo, who named BofA a top pick with a price target of $52. “Bank of America has de-risked its balance sheet more than any other big bank and is more recession ready than at any time in the past half-century.”

Around 9 times 2023 earnings. 2.7% dividend.

I am 100% sure about BOA's not taking on bad paper. In my previous life I saw (and benefitted from and was good at) having banks approve the most idiotic loans you could think of. Not my rules - their rules. Some nights I'd drive home shaking my head even though it was to my benefit. But BOA? Nope, if the people weren't near perfect, I didn't even try.

The article talks about this as a strength. Makes sense - - providing a potential recession is not a White Collar Recession....when there's reason to believe it might well be?

Would love any thoughts. Thanks.
MichealKnight is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-30-2022, 04:48 AM   #2
Thinks s/he gets paid by the post
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 4,962
On principle, I own no individual stocks. They are too subject to unforeseen events. What if you had been following someone's great write-up about Southwest Airlines?
__________________
"The mountains are calling, and I must go." John Muir
DrRoy is offline   Reply With Quote
Old 12-30-2022, 05:56 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 5,638
Quote:
Originally Posted by MichealKnight View Post
I was hoping to hear opinions on bank stocks - and amongst them, Bank of America.



Disclosure: I've held onto 70% of my original positions in regional banks like RF, andTFC(Trust -the old BBT). Certainly off their highs quite a bit - but with divs from 3.5-4.9, banks positions in growth areas, my (naive?) belief that regional banks know their clients a bit, and therefore make prudent loans I've held on. As someone whose goal is an annualized 5-6% nominal return - I felt this is a place to be.(Divs help my picture a lot due to tax advantages)



Bank of America.... I've pasted a few Barron's snippets in case paywall comes up:



https://www.barrons.com/articles/sto...=Searchresults



"The bank’s conservatism extends to its dividend, with an earnings payout ratio below some of its major rivals. The bank lends mainly to an affluent customer base that should hold up better in an economic slowdown. It’s getting a boost to margins from rising short-term rates. "





“Over my three decades following the industry, I’ve seldom seen the fundamentals improve the way they have at Bank of America and the stock perform so poorly,” says Wells Fargo Securities analyst Mike Mayo, who named BofA a top pick with a price target of $52. “Bank of America has de-risked its balance sheet more than any other big bank and is more recession ready than at any time in the past half-century.”



Around 9 times 2023 earnings. 2.7% dividend.



I am 100% sure about BOA's not taking on bad paper. In my previous life I saw (and benefitted from and was good at) having banks approve the most idiotic loans you could think of. Not my rules - their rules. Some nights I'd drive home shaking my head even though it was to my benefit. But BOA? Nope, if the people weren't near perfect, I didn't even try.



The article talks about this as a strength. Makes sense - - providing a potential recession is not a White Collar Recession....when there's reason to believe it might well be?



Would love any thoughts. Thanks.

I have a mix of dividend growing stocks and ETFs. BAC is on my list to purchase next month when we have some cash freeing up. It’s a solid bank that grows its dividend at a double digit rate most years. It’s current quarterly dividend is $0.22/share for a 2.69% yield. It’s stock price is reasonable too. It would be my first choice of a dividend stock, but I do want to add it to my current mix.
Dash man is offline   Reply With Quote
Old 12-30-2022, 07:18 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 7,546
I do like the banks. If we have a recession they will fall further. But the divs pay you to wait and they will move higher quickly when the economy turns up. Downside limited to this point.

I own or have recently owned BofA, JPM, MS, GS, MTB, TFC a regional bank index and a money center bank index. I sold FNH at a very nice gain after it agreed to be acquired.

I plan to sell the indexes soon and move that back into individual names.
Montecfo is offline   Reply With Quote
Old 12-30-2022, 08:14 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Sep 2014
Location: The Great Wide Open
Posts: 3,789
While I am not adding to my position, I have owned BoA for at least 18 years. Originally purchased 200 at $45, I road it down to $3 during the Great Recession, and backed up the truck, and bought 3000 more. Sold some awhile back at $38, still own about 2000.
__________________
Give me Liberty or give me Death. Patrick Henry
Winemaker is offline   Reply With Quote
Old 12-30-2022, 08:19 AM   #6
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,645
The big banks and the FED are connected at the hip. No big bank will fail in the U.S. unless we are taken over by the Chinese (which could happen someday).

Actually, the Canadian big banks are great investments also.
__________________
*********Go Astros!*********
aja8888 is offline   Reply With Quote
Old 12-30-2022, 08:33 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Location: SoCal, Lausanne
Posts: 4,408
Money normally flows into bank stocks 3-6 months before the last rate hike. Nothing wrong with Bank of America. I own their bonds. I even owned their bonds though from 2009 and 2019 when the headlines were predicting a collapse of Band of America in 2011. Obviously that never happened.

As stock investors, look at the long term stock charts of Canadian banks as such as the Royal Bank of Canada, TD Bank, Bank of Montreal, Scotia Bank, and CIBC. The long term trend is up. They have never cut their dividends like U.S. banks. None required bailouts in 2008/2009. The issue you will have with Canadian bank stocks is that 15% of the dividend is held back by the Canadian Revenue Agency and you have to claim a foreign tax credit or file a form with Canada to seek a refund.
Freedom56 is offline   Reply With Quote
Old 12-31-2022, 11:38 AM   #8
Recycles dryer sheets
 
Join Date: Jan 2022
Location: Zürich
Posts: 161
No opinion about Bank of America.
This year I made nice money with European Banks, especially with Irish Bank stocks.
For 2023 I expect another 10 to 20% upside potential with European Bank Stocks.
But, if interest rates are hiking up too fast, provisions for bad credit will go up too.
The momentum for banks might change during the year.
Because of the war, the banks are not too expensive.

If we get a soft landing. Perfect. Dividends in 2023/2024 are expected to go up.
The banks are still undervalued compared with the before credit crunch times.

p.s.
don't gamble with Credit Suisse
matjung is offline   Reply With Quote
Old 12-31-2022, 11:48 AM   #9
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,645
Quote:
Originally Posted by matjung View Post
p.s.
don't gamble with Credit Suisse
That's old news around here!
__________________
*********Go Astros!*********
aja8888 is offline   Reply With Quote
Old 01-01-2023, 07:15 AM   #10
Moderator
 
Join Date: Jul 2017
Posts: 5,664
Don't even remember how and when BOA got into my portfolio, but it's been there a looooooog time. Treated me better than Washington Mutual and Citibank, which made me leery of bank stocks. I bought a tiny bit of NYCB in the last year or so, which has been relatively flat. I hope it doesn't go under. I expect the banks will go down the first half of next year - but what do I know?
__________________
Use it up, wear it out, make it do or do without.
MarieIG is offline   Reply With Quote
nycb
Old 01-01-2023, 09:31 AM   #11
Full time employment: Posting here.
 
Join Date: May 2019
Posts: 520
nycb

Quote:
Originally Posted by MarieIG View Post
Don't even remember how and when BOA got into my portfolio, but it's been there a looooooog time. Treated me better than Washington Mutual and Citibank, which made me leery of bank stocks. I bought a tiny bit of NYCB in the last year or so, which has been relatively flat. I hope it doesn't go under. I expect the banks will go down the first half of next year - but what do I know?
Didn't NYCB just complete some acquisition? What is the impetus for worry they will go under? Thanks

Disclosure: Small position of NYCB. Love the dividend. Worried by the dividend
MichealKnight is offline   Reply With Quote
Old 01-01-2023, 09:45 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,686
Quote:
Originally Posted by MichealKnight View Post
Didn't NYCB just complete some acquisition? What is the impetus for worry they will go under? Thanks

Disclosure: Small position of NYCB. Love the dividend. Worried by the dividend
NYCB is giving to you part of your initial investment.
https://www.portfoliovisualizer.com/...ocation2_2=100

Look at recent performance comparison with JPM, for example. The link above is for the most recent ten-year period.
target2019 is offline   Reply With Quote
Old 01-14-2023, 12:14 PM   #13
Recycles dryer sheets
 
Join Date: Mar 2015
Posts: 180
Quote:
Originally Posted by MichealKnight View Post
I was hoping to hear opinions on bank stocks - and amongst them, Bank of America.



Disclosure: I've held onto 70% of my original positions in regional banks like RF, andTFC(Trust -the old BBT). Certainly off their highs quite a bit - but with divs from 3.5-4.9, banks positions in growth areas, my (naive?) belief that regional banks know their clients a bit, and therefore make prudent loans I've held on. As someone whose goal is an annualized 5-6% nominal return - I felt this is a place to be.(Divs help my picture a lot due to tax advantages)



Bank of America.... I've pasted a few Barron's snippets in case paywall comes up:



https://www.barrons.com/articles/sto...=Searchresults



"The bank’s conservatism extends to its dividend, with an earnings payout ratio below some of its major rivals. The bank lends mainly to an affluent customer base that should hold up better in an economic slowdown. It’s getting a boost to margins from rising short-term rates. "





“Over my three decades following the industry, I’ve seldom seen the fundamentals improve the way they have at Bank of America and the stock perform so poorly,” says Wells Fargo Securities analyst Mike Mayo, who named BofA a top pick with a price target of $52. “Bank of America has de-risked its balance sheet more than any other big bank and is more recession ready than at any time in the past half-century.”



Around 9 times 2023 earnings. 2.7% dividend.



I am 100% sure about BOA's not taking on bad paper. In my previous life I saw (and benefitted from and was good at) having banks approve the most idiotic loans you could think of. Not my rules - their rules. Some nights I'd drive home shaking my head even though it was to my benefit. But BOA? Nope, if the people weren't near perfect, I didn't even try.



The article talks about this as a strength. Makes sense - - providing a potential recession is not a White Collar Recession....when there's reason to believe it might well be?



Would love any thoughts. Thanks.


As someone who retired from Truist. It would be foolish to confuse it with BBT.
thepalmersinking is offline   Reply With Quote
Old 01-16-2023, 11:48 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,309
Quote:
Originally Posted by thepalmersinking View Post
As someone who retired from Truist. It would be foolish to confuse it with BBT.

Could you explain a bit?
Some mergers are acquisitions in disguise.
BIL worked at Wells Fargo entire career. He claims their merger with Wachovia was really a takeover. The WF culture dissolved.
Truist = Suntrust + BBT, right? I take it you worked primarily for BBT pre merger? I have a + image of the culture at BBT. No clue on their merger partner.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Old 01-16-2023, 12:27 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Dec 2014
Location: Huntsville, AL/Helen, GA
Posts: 6,002
One of my friend's father bought into some small banks in Atlanta area, merged them and sold out to Bank of America. It's been said he's B of A's largest individual shareholder. He flies in a JetRanger helicopter to work to avoid Atlanta traffic.

I've never really cared for those big mega banks or the way they operate. Some stocks have performed better than others. And heaven knows that Bank of America has its share of operational, profitability and governmental problems the last 20 years.

Another guy I did business with and a partner purchased a small bank in North Georgia. They found a young aggressive banker in Atlanta and installed him running the bank. Their whole intention was to go around buying small underperforming banks county by county and merging them. They also expanded inexpensively by placing bank branches in grocery stores and Walmarts. As North Georgia's economy has been so strong, their ROE on the combined banks' stock has been out of sight. I wouldn't be surprised if my ole buddy's stock is now worth $100 million.

I would be looking for bank stocks of very well managed regional community banks if I was going to purchase bank stock. There always seems to be a leader of the pack in banking--with all the other bank locations looking like ghost busineses.
Bamaman is offline   Reply With Quote
Old 01-16-2023, 01:08 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 17,205
I like JPM as it seems to be the best run bank and is making good profits..


I think BAC and Wells have a potential to have bigger returns since they have not been run as well so can increase their profits more... just not sure if they will be...
Texas Proud is offline   Reply With Quote
Old 01-20-2023, 11:36 AM   #17
Recycles dryer sheets
 
Join Date: Jan 2022
Location: Zürich
Posts: 161
The banks in Europe/Greece are starting to become interesting.
Reason: They are behind in recovering from Corona/Covid
Parliament Elections in 2023 - it is expected to boost Athens Stock Market
I have no idea, if those stocks are tradable in the US.



The recovery of Europe/Irish banks may slowly come to an end.
One may have to wait until March to find out how business was doing last year.
matjung is offline   Reply With Quote
Old 02-01-2023, 10:08 PM   #18
Recycles dryer sheets
 
Join Date: Dec 2007
Location: Jacksonville
Posts: 97
Oh cool more bank people lol.

I have been obsessed lately with researching and investing into regional banks, they have a lot of great value, good dividends, a few are prime investments, great cash flow, low price to book value etc.

Go to finviz.com and run through a few screeners for them. You will find some good ones.
SunGuy is offline   Reply With Quote
Old 02-15-2023, 01:20 PM   #19
Recycles dryer sheets
 
Join Date: Jan 2022
Location: Zürich
Posts: 161
Again I cannot help with BoA, but maybe you can help me with valuation concepts for Banks.


Given 4 European Banks.
For simplicity, dividends in 2021 and 2022 was zero, expectations for 2023 are not much better.



What criteria would you choose to rank or value banks.
In my humble opinion, the first two banks are under valued, compared with the last two banks.

In 2021 Net Income was negative at all four of them.

All four banks are rather regional/national banks, with not much international business.
I am looking for inspiration about how to value them.
Would you compare a regional bank from Los Angeles with New York.
Or would that feel like comparing Apples with Oranges



Sales 620
Capitalization 1055
Net income 168

Sales 2000
Capitalization 2800
Net income 540

Sales 3300
Capitalization 10523
Net income 1000

Sales 3700
Capitalization 10556
Net income 1130
matjung is offline   Reply With Quote
Old 02-15-2023, 01:27 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 7,546
Quote:
Originally Posted by matjung View Post
Again I cannot help with BoA, but maybe you can help me with valuation concepts for Banks.


Given 4 European Banks.
For simplicity, dividends in 2021 and 2022 was zero, expectations for 2023 are not much better.



What criteria would you choose to rank or value banks.
In my humble opinion, the first two banks are under valued, compared with the last two banks.

In 2021 Net Income was negative at all four of them.

All four banks are rather regional/national banks, with not much international business.
I am looking for inspiration about how to value them.
Would you compare a regional bank from Los Angeles with New York.
Or would that feel like comparing Apples with Oranges



Sales 620
Capitalization 1055
Net income 168

Sales 2000
Capitalization 2800
Net income 540

Sales 3300
Capitalization 10523
Net income 1000

Sales 3700
Capitalization 10556
Net income 1130
Banks are usually valued by multiples of book value and PE ratio.
Montecfo is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Bank of America BACKSTABBERS! thefed FIRE and Money 12 01-24-2008 01:08 PM
Bank of America - Anyone use 'em? Shabber2 FIRE and Money 10 11-08-2007 09:27 AM
Bank of America 2B Active Investing, Market Strategies & Alternative Assets 16 08-04-2007 02:53 PM
Bank of America CoolChange FIRE and Money 22 05-01-2007 04:17 PM
Nothing Wrong With America That Can't Be Fixed By What's Right With America Danny Other topics 12 02-17-2007 11:06 PM

» Quick Links

 
All times are GMT -6. The time now is 02:11 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.