Published Sat, 17 Oct 2020 06:20:27 -0400 on Seeking Alpha
Seeking AlphaDividend Ideas | Financials Bank Of America: Now Is A Great Time To Buy This 3% YielderOct. 17, 2020 6:20 AM ET|| About: Bank of America Corporation (BAC)by: Gen AlphaGen Alpha Long Only, Value, Growth, Growth At Reasonable PriceSummaryBank of America has seen its share of near-term headwinds, but some things are starting to look up for the bank.
While interest rates remain low, the potential for an inflation comeback could cause an upward reversal in the rates.
I see BofA as trading at the low end of economic cyclicality and believe now is a great buying opportunity.
The banking sector continues to be challenged in the current macroeconomic environment. While there are likely more questions than answers in the near term, I do believe that this presents good buying opportunities for those with a medium- to long-term outlook. In this article, I'm focused on Bank of America (NYSE: BAC), whose share price has largely underperformed the market, with a 31% decline since the start of the year. I evaluate what makes Bank of America an attractive buy at the current price, so let's get started.
A Look Into Bank of America
Bank of America is perhaps one of those companies that doesn't need an introduction. As the second-largest U.S. money center bank by assets, it has a leading presence in nearly all markets in the country. BAC ranks first in consumer deposit market share and ranks second in retail mortgages, small-business lending, and has a solid presence in corporate banking. It also has a strong retail brokerage and wealth management arm through Merrill Lynch, and is a top 5 global investment bank. Given these characteristics, I see BAC as having a strong moat-worthy brand and business model.
What draws me to BAC is its leading presence and the durable nature of the banking industry. While I do have sufficient exposure to technology stocks, I see the banking industry as being less vulnerable to the so-called "creative... Read more