Bank of America (NYSE:BAC) & Raymond James Financial (NYSE:RJF) Financial Survey

Raymond James Financial (NYSE:RJF) and Bank of America (NYSE:BAC) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Volatility and Risk

Raymond James Financial has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Raymond James Financial	13.56%	18.38%	2.63%
Bank of America	14.81%	10.25%	0.84%

Institutional and Insider Ownership

83.8% of Raymond James Financial shares are owned by institutional investors. Comparatively, 70.7% of Bank of America shares are owned by institutional investors. 0.5% of Raymond James Financial 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 stock is poised for long-term growth.

Dividends

Raymond James Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.2%. Bank of America pays an annual dividend of $1.04 per share and has a dividend yield of 2.0%. Raymond James Financial pays out 19.6% of its earnings in the form of a dividend. Bank of America pays out 30.4% 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. Raymond James Financial has increased its dividend for 3 consecutive years and Bank of America has increased its dividend for 11 consecutive years. Bank of America is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Raymond James Financial and Bank of America”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Raymond James Financial	$14.92 billion	2.26	$2.07 billion	$10.20	16.62
Bank of America	$192.43 billion	1.95	$27.13 billion	$3.42	14.84

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Raymond James Financial and Bank of America, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Raymond James Financial	0	8	3	1	2.42
Bank of America	0	5	17	0	2.77

Raymond James Financial presently has a consensus target price of $163.80, indicating a potential downside of 3.38%. Bank of America has a consensus target price of $50.13, indicating a potential downside of 1.25%. Given Bank of America’s stronger consensus rating and higher possible upside, analysts clearly believe Bank of America is more favorable than Raymond James Financial.

About Raymond James Financial

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment provides corporate loans, SBL, tax-exempt loans, and residential loans. The Other segment engages in private equity activities, including various direct and third party private equity investments; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is based in St. Petersburg, Florida.

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.