Regions Financial (NYSE:RF) and Bank of America (NYSE:BAC) Head to Head Analysis

Regions Financial (NYSE:RF) and Bank of America (NYSE:BAC) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Volatility & Risk

Regions Financial has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500.

Dividends

Regions Financial pays an annual dividend of $0.62 per share and has a dividend yield of 3.1%. Bank of America pays an annual dividend of $0.72 per share and has a dividend yield of 1.8%. Regions Financial pays out 59.6% of its earnings in the form of a dividend. Bank of America pays out 38.5% 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. Regions Financial has increased its dividend for 1 consecutive years and Bank of America has increased its dividend for 1 consecutive years.

Earnings and Valuation

This table compares Regions Financial and Bank of America’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Regions Financial $6.66 billion 2.89 $1.09 billion $1.04 19.25
Bank of America $93.75 billion 3.67 $17.89 billion $1.87 21.50

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

Insider and Institutional Ownership

72.2% of Regions Financial shares are held by institutional investors. Comparatively, 70.2% of Bank of America shares are held by institutional investors. 0.2% of Regions Financial shares are held by insiders. Comparatively, 0.2% of Bank of America shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Regions Financial 23.34% 9.70% 1.07%
Bank of America 24.09% 8.90% 0.78%

Analyst Ratings

This is a breakdown of current ratings for Regions Financial and Bank of America, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regions Financial 1 7 15 0 2.61
Bank of America 2 6 14 0 2.55

Regions Financial presently has a consensus price target of $19.97, suggesting a potential downside of 0.25%. Bank of America has a consensus price target of $38.57, suggesting a potential downside of 4.06%. Given Regions Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Regions Financial is more favorable than Bank of America.

Summary

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

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, branch small business and indirect loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. The company also provides investment and insurance products; low income housing tax credit corporate fund syndication services; and other specialty financing services. As of February 25, 2021, it operated 1,300 banking offices and 2,000 automated teller machines across the South, Midwest and Texas. Regions Financial Corporation was founded in 1970 and is headquartered in Birmingham, Alabama.

About Bank of America

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 April 15, 2021, it served approximately 66 million consumer and small business clients with approximately 4,300 retail financial centers; approximately 17,000 ATMs; and digital banking platforms with approximately 40 million active users. The company was founded in 1784 and is headquartered in Charlotte, North Carolina.

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