Nicolet Bankshares (NYSE:NIC) & Bank of America (NYSE:BAC) Critical Contrast

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

Dividends

Nicolet Bankshares pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Bank of America pays an annual dividend of $0.96 per share and has a dividend yield of 2.7%. Nicolet Bankshares pays out 24.6% of its earnings in the form of a dividend. Bank of America pays out 31.3% 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 3 consecutive years. Bank of America is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nicolet Bankshares	14.69%	9.71%	1.14%
Bank of America	15.42%	11.38%	0.93%

Institutional and Insider Ownership

43.1% of Nicolet Bankshares shares are owned by institutional investors. Comparatively, 70.7% of Bank of America shares are owned by institutional investors. 16.4% of Nicolet Bankshares shares are owned by company insiders. Comparatively, 0.3% of Bank of America shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Nicolet Bankshares and Bank of America, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nicolet Bankshares	0	3	1	0	2.25
Bank of America	1	7	8	0	2.44

Nicolet Bankshares presently has a consensus target price of $88.50, suggesting a potential upside of 13.96%. Bank of America has a consensus target price of $38.29, suggesting a potential upside of 6.52%. Given Nicolet Bankshares’ higher possible upside, analysts plainly believe Nicolet Bankshares is more favorable than Bank of America.

Risk & Volatility

Nicolet Bankshares has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Earnings and Valuation

This table compares Nicolet Bankshares and Bank of America’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nicolet Bankshares	$418.83 million	2.75	$61.52 million	$4.06	19.13
Bank of America	$171.91 billion	1.65	$26.52 billion	$3.07	11.71

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

Summary

Bank of America beats Nicolet Bankshares on 10 of the 17 factors compared between the two stocks.

About Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the bank holding company for Nicolet National Bank that provides banking products and services for businesses and individuals in Wisconsin and Michigan. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien and junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, and remote deposit capture services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks, as well as facilitates crop insurance products. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. The company was incorporated in 2000 and is headquartered in Green Bay, Wisconsin.

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. It operates in 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, certificates of deposit and IRAs, non-interest and interest-bearing checking accounts, and investment accounts and products; credit and debit cards; residential mortgages, and home equity loans; and direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment provides investment management, brokerage, banking, and trust and retirement products and services; wealth management solutions; and customized solutions, including specialty asset management services. The Global Banking segment offers 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, short-term investing options, and merchant services; working capital management solutions; debt and equity underwriting and distribution, and merger-related and other advisory services; and fixed-income and equity research, and certain market-based services. The Global Markets segment provides market-making, financing, securities clearing, settlement, and custody services; securities and derivative products; and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1784 and is based in Charlotte, North Carolina.