Bank of America (NYSE:BAC) and BancFirst (NASDAQ:BANF) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Bank of America and BancFirst, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of America 0 9 6 0 2.40
BancFirst 0 0 0 0 N/A

Bank of America currently has a consensus target price of $33.07, suggesting a potential upside of 15.28%. Given Bank of America’s higher possible upside, research analysts plainly believe Bank of America is more favorable than BancFirst.

Dividends

Bank of America pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. BancFirst pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Bank of America pays out 23.0% of its earnings in the form of a dividend. BancFirst pays out 31.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bank of America has raised its dividend for 5 consecutive years and BancFirst has raised its dividend for 17 consecutive years. BancFirst is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Bank of America and BancFirst’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of America 25.42% 11.79% 1.22%
BancFirst 29.07% 14.31% 1.68%

Valuation and Earnings

This table compares Bank of America and BancFirst’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of America $110.58 billion 2.66 $28.15 billion $2.61 10.99
BancFirst $428.40 million 4.25 $125.81 million $3.82 14.60

Bank of America has higher revenue and earnings than BancFirst. Bank of America is trading at a lower price-to-earnings ratio than BancFirst, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

65.1% of Bank of America shares are owned by institutional investors. Comparatively, 34.2% of BancFirst shares are owned by institutional investors. 0.2% of Bank of America shares are owned by insiders. Comparatively, 38.3% of BancFirst shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Bank of America has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500. Comparatively, BancFirst has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Summary

BancFirst beats Bank of America on 9 of the 16 factors compared between the two stocks.

Bank of America Company Profile

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. It operates through four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, CDs 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. This segment provides its products and services through approximately 4,300 financial centers; 16,300 ATMs; call centers; and digital banking platforms. The GWIM segment offers investment management, brokerage, banking, and trust and retirement products; and wealth management solutions targeted to high net worth and ultra high net worth clients, as well as customized solutions to meet clients' wealth structuring, investment management, and trust and banking needs, including specialty asset management services. The Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1874 and is headquartered in Charlotte, North Carolina.

BancFirst Company Profile

BancFirst Corporation operates as the bank holding company for BancFirst that provides a range of commercial banking services to retail customers, and small to medium-sized businesses. It operates through Metropolitan Banks, Community Banks, and Other Financial Services segments. The company offers checking accounts, negotiable order of withdrawal accounts, savings accounts, money market accounts, sweep accounts, club accounts, individual retirement accounts, and certificates of deposit, as well as overdraft protection and auto draft services. It also provides commercial, financial, and other loans for working capital, facilities acquisition or expansion, purchase of equipment, and other needs; construction, farmland, one-to-four family residence, multifamily residential property, and commercial real estate loans; and loans to finance purchases of consumer goods, such as automobiles, boats, household goods, vacations, and education. In addition, the company engages in the investment management and administration of trusts for individuals, corporations, and employee benefit plans, as well as bond trustee and paying agent business for various Oklahoma municipalities and governmental entities; and provision of item processing, research, and other correspondent banking services for financial institutions and governmental units. Further, it is involved in real estate investment and insurance agency services; and providing funds transfer, collection, safe deposit box, cash management, retail brokerage, and other services for individual and corporate customers. The company serves customers in non-metropolitan trade centers and cities in the metropolitan statistical areas of Oklahoma. It operates through 107 banking locations serving 58 communities in Oklahoma. The company was formerly known as United Community Corporation and changed its name to BancFirst Corporation in November 1988. BancFirst Corporation was incorporated in 1984 and is based in Oklahoma City, Oklahoma.

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