For most investors, how much a stock’s price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you’d invested in Bank of America (BAC) ten years ago? It may not have been easy to hold on to BAC for all that time, but if you did, how much would your investment be worth today?
Bank of America’s Business In-Depth
With that in mind, let’s take a look at Bank of America’s main business drivers.
Headquartered in Charlotte, NC, Bank of America Corporation (incorporated in 1874) is one of the largest financial holding companies in the United States. With total assets worth $2.97 trillion as of Mar 31, 2021, it provides a diverse range of banking and non-banking financial services and products.
Bank of America presents results of operations through the following business segments:
Consumer Banking (35.1% of total assets in 2020), comprising Deposits and Consumer Lending businesses, provides a wide range of credit, banking and investment products and services to consumers and businesses.
Global Wealth & Investment Management (13.1%) consisting of Merrill Lynch Global Wealth Management and U.S. Trust, Bank of America Private Wealth Management, offers wealth structuring, investment management, trust and banking needs and specialty asset management services.
Global Banking (20.6%), which includes Global Corporate Banking, Global Commercial Banking, Business Banking and Global Investment Banking, provides lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services.
Global Markets (21.9%) offers sales and trading, market-making, financing, securities clearing, settlement and custody, and risk-management services globally.
All Other (9.3%) consists of ALM activities, equity investments, the international consumer card business, liquidating businesses, residual expense allocations and other.
In March 2021, Bank of America acquired Axia Technologies Inc.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Bank of America, if you bought shares a decade ago, you’re likely feeling really good about your investment today.
A $1000 investment made in May 2011 would be worth $3,412.67, or a 241.27% gain, as of May 7, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500’s rally of 213.51% and gold’s return of 17.04% over the same time frame.
Going forward, analysts are expecting more upside for BAC.
Bank of America’s shares have outperformed the industry over the past year. Its earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters. The company’s first-quarter 2021 results reflected solid capital markets performance, big reserve release and adverse impact of muted loan demand. Opening of new branches, enhanced digital offerings, strategic buyouts and efforts to manage expenses will aid profitability in the quarters ahead. Low interest rates and no near-term chance of change in the same are expected to keep hurting the bank’s margins and interest income. Also, faltering loan demand poses a concern. However, a strong balance sheet and liquidity position are expected to continue aiding its financials. Further, the company will keep enhancing shareholder value through sustained capital deployments.
The stock is up 5.82% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 10 higher, for fiscal 2021. The consensus estimate has moved up as well.
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Bank of America Corporation (BAC): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.