Bank of America Is One of the Largest Financial Companies by Market Cap. But Is It a Buy?
Bank of America is the second largest U.S. bank and the fifth largest financial company by market capitalization.
The company just reported strong second-quarter earnings.
There could be some positive tailwinds coming for the banking industry.
10 stocks we like better than Bank of America ›
To say that Bank of America's (NYSE: BAC) progress in the 15 years since the end of the financial crisis has been impressive would be an understatement. The bank went from being one of the most troubled of the major financial institutions to one of the most respected in the industry. In fact, Bank of America is now the second largest U.S. bank stock by market cap.
However, Bank of America could still be an attractive business to invest in, especially now. Let's take a quick look at where Bank of America ranks in the overall financial sector, how the business is doing, and why now might be a smart time to buy.
The largest financials companies by market cap
The largest financial company in the world is Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), with a market cap of more than $1 trillion. Many investors don't realize it, but Berkshire is technically an insurance company at heart -- Warren Buffett built its empire using insurance float from subsidiaries like GEICO and others.
With that in mind, here's where Bank of America fits among the largest financial companies (the link leads to our up-to-date list) based in the United States by market cap:
Company (Symbol)
Description
Market Capitalization
Berkshire Hathaway
Conglomerate with insurance focus
$1.02 trillion
JPMorgan Chase (NYSE: JPM)
Bank
$809 billion
Visa (NYSE: V)
Payment processor
$677 billion
Mastercard (NYSE: MA)
Payment processor
$502 billion
Bank of America
Bank
$352 billion
Data source: CNBC.com. Market caps as of 7/21/2025.
So, as of this writing, Bank of America is the fifth largest financial sector company by market cap and the second largest bank stock. It's likely it will stay this way for at least a little while, as there's a wide gap between Bank of America and the No. 4 (Visa) as well as with the No. 6, fellow big bank Wells Fargo (NYSE: WFC), which has a $260 billion market cap.
How it's going
Bank of America, and most other large bank stocks for that matter, just reported second-quarter results. In general, the numbers looked strong, and here are some key highlights:
Revenue and EPS grew by 4% and 7% year over year, respectively.
Customer deposits grew 5% to $2 trillion. Bank of America has the No. 1 retail deposit market share, and this growth rate was better than most peers.
The bank achieved a 10% return on equity (ROE), which is generally considered to be the threshold of a strong ROE.
Consumer banking added 175,000 net new checking accounts and consumer investment accounts grew by 13% thanks to strong market performance and inflows of capital.
Bank of America has the No. 3 investment banking market share year-to-date.
The company is doing arguably the best of the big banks when it comes to leveraging AI. It has 1,400 AI and machine learning patents, and, just to name one example, its "Ask Merrill" and "Ask Private Bank" AI tools get 23 million interactions per year.
Bank of America spent $5.3 billion on stock buybacks and increased its dividend by 8%.
Net interest yield increased by 3 basis points year over year despite no recent Federal Reserve rate cuts.
Bank of America's net charge-off rate improved by four basis points compared with a year ago.
I'm paying close attention to numbers like the net interest margin in the persistent high-rate environment, and the bank's NCO rate, which is a great indicator of the financial health of its customers.
Is Bank of America a buy?
The bottom line is Bank of America is an excellent institution, and its management has done a great job of embracing technology. If rates start to fall later this year as many expect, it could provide a nice tailwind for the stock, and the banking industry as a whole.
In fact, there could be several positive tailwinds in the next few years, including a looser regulatory environment, the surge in IPO and M&A activity we're seeing, and potential lower corporate tax rates. With Bank of America shares trading for less than 13 times forward earnings and a historically attractive valuation of less than 1.3 times book value, Bank of America could be an excellent performer over the next few years.
Should you buy stock in Bank of America right now?
Before you buy stock in Bank of America, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bank of America wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $641,800!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,023,813!*
Now, it's worth noting Stock Advisor's total average return is 1,034% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 21, 2025
Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money. Matt Frankel has positions in Bank of America and Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway, JPMorgan Chase, Mastercard, and Visa. The Motley Fool has a disclosure policy.
Bank of America Is One of the Largest Financial Companies by Market Cap. But Is It a Buy? was originally published by The Motley Fool
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 minutes ago
- Yahoo
Blues Have Big Move To Make With Breakout Forward
The St. Louis Blues' decision to tender an offer sheet to forward Dylan Holloway this past off-season undoubtedly proved to be a great decision. After the Edmonton Oilers elected not to match the Blues' two-year, $4,580,914 offer sheet for Holloway, he broke out in a major way in his first season with St. Louis.
Yahoo
2 minutes ago
- Yahoo
The Democratic Party's Brand Is Cooked
Voters have increasingly little faith in the Democrats, a new Wall Street Journal poll found, with the party reaching its lowest favorability rating in more than three decades. Voters overwhelmingly believe that Republicans are better able to handle key issues in Congress than Democrats. The survey found that the majority of voters, 63 percent, have an unfavorable view of the Democratic Party. Only 33 percent hold a favorable view. This is the most unpopular that Democrats have been according to Journal polls dating back to 1990. As President Donald Trump enacts an increasingly authoritarian agenda and provides little economic benefit to the average American, Democrats are hopeful anti-Trump backlash will give them a strong showing in the 2026 midterm election. While slightly more people expect to vote for Democrats next year than Republicans, according to the Journal poll, Democrats' overall favorability has only dropped since Trump took office. 'The Democratic brand is so bad that they don't have the credibility to be a critic of Trump or the Republican Party,' John Anzalone, a Democratic pollster who worked on the survey, told the Journal. 'Until they reconnect with real voters and working people on who they're for and what their economic message is, they're going to have problems.' Anzalone's firm, which consulted for both President Joe Biden and Vice President Kamala Harris' presidential campaigns, worked on the survey with Trump pollster Tony Fabrizio. According to the survey, voters think Republicans in Congress are more capable at handling the economy, inflation and rising prices, tariffs, immigration, 'illegal' immigration, the Russia-Ukraine war, and foreign policy. On the topic of 'illegal' immigration, 48 percent have their faith in Republicans and 24 percent choose Democrats. Democrats scored higher on health care and vaccine policy. Both parties tied at 37 percent on the issue of looking out for middle class families. 'As much as I fully believe that Democrats are not doomed for all eternity, I also believe that many Democrats aren't quite grappling with the serious credibility problems the party still faces,' Democratic operative Tré Easton posted on X. 'The podcasts and everything are real cute, but we've got work to do.' Democrats also scored low in a Quinnipiac poll released earlier this month. In that survey, approval of congressional Democrats reached a new low of 19 percent, with 72 percent of voters saying they disapproved. 'This is a record low since March 2009 when the Quinnipiac University Poll first began asking this question of registered voters,' the university wrote. The Quinnippiac poll found that even registered Democrats disapproved of the party: Thirty-nine percent approved of how Democrats in Congress were handling their jobs, while 52 percent disapproved. Among registered Republicans, 77 percent approved of how Republicans are operating in Congress. In the findings from the Journal, voters are mixed on Trump. About half, or 55 percent, of voters say the country is headed in the wrong direction. This is down from 70 percent in January, meaning voters have become more optimistic since Trump took office, yet Trump is not wildly popular. He has a favorability rating of 45 percent, and an unfavorability rating of 52 percent. A total of 46 percent approve of what Trump is doing as president, and 52 percent disapprove. Fifty-three percent disapprove of Trump's handling of the economy, while 44 percent approve. On the issues of inflation, tariffs, immigration, looking out for middle class families, health care, vaccine policy, foreign policy, and the Russia-Ukraine war, voters disapprove of the job Trump is doing. On the topic of 'illegal' immigration, though, 51 percent approve and 49 percent disapprove. The Republican Party is not wildly popular either, though, with 54 percent of voters having an unfavorable view, compared to the 43 percent who have a favorable view. More from Rolling Stone Trump Claims Someone May Have Forged His Signature on Birthday Letter to Epstein I Worked With Stephen Colbert. Here's Why His Cancellation Should Scare You Yes, America Is an Oligarchy Best of Rolling Stone The Useful Idiots New Guide to the Most Stoned Moments of the 2020 Presidential Campaign Anatomy of a Fake News Scandal The Radical Crusade of Mike Pence
Yahoo
2 minutes ago
- Yahoo
B.C.'s independent wood manufacturers decry retroactive U.S. softwood duties
VANCOUVER — British Columbia's independent wood product makers say hundreds of small- and medium-sized manufacturers may be forced to shut down in light of the latest decision from the United States to raise anti-dumping duties on Canadian softwood. The province's Independent Wood Processors Association says in a release that the U.S. Commerce Department's decision this week to raise duties also includes a requirement for Canadian companies to retroactively remit duties for products shipped to the United States since Jan.1, 2023. Association chair Andy Rielly says in a statement that the requirement to pay duties on products shipped in the last 31 months could not only force small B.C. producers to shut down, but may also threaten operators' personal assets as they may have to risk using their homes as collateral to secure bonds to pay. Rielly is urging the Canadian government to create support programs to make sure B.C.'s independent wood processors can keep workers employed and their companies running. The U.S. Commerce Department said earlier in the week it will raise anti-dumping duties on Canadian softwood to 20.56 per cent, drawing the ire of several B.C. industry groups such as the B.C. Council of Forest Industries and the B.C. Lumber Trade Council. The Independent Wood Processors Association says the the "all-others" rate affecting its members will be raised from 14.4 per cent to 27.3 per cent, with the possibly of another increase "in the coming weeks" potentially pushing the duties for their products to as high as 35 per cent. 'Until the Canadian government can negotiate a settlement to this long-festering dispute, we need a government support program to keep our workers employed,' Rielly says, adding an overall duty of 35-per-cent would force members to pay retroactive duties of 27 per cent on products already shipped. Association executive director Brian Menzies describes independent wood product producers as "collateral damage" in the trade war, and says the only hope they have of avoiding the hit is either "a favourable appeal from the Canada-US-Mexico Agreement" or "pursuing a bilateral negotiated resolution." 'We should not face export taxes or quotas," Menzies says. "Our raw materials are not subsidized, and we are too small to 'dump' our products in the U.S. market. "We acquire logs and lumber at 'arm's length' from various suppliers on the open market, just like claims made by members of the U.S. Lumber Coalition, and yet our Canadian companies along with U.S. consumers must pay these unfair and costly duties.' Prime Minister Mark Carney had previously said that a future U.S.-Canada trade deal could include softwood lumber quotas. This report by The Canadian Press was first published July 26, 2025. Chuck Chiang, The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
