Apple Inc. (AAPL): Is Bank of America Corp (BAC) a Better Buy?

A year ago, Apple Inc. (NASDAQ:AAPL) was in the midst of a blistering nine-month stretch, cementing itself at the top of the market. Meanwhile, Bank of America Corp (NYSE:BAC) stood pat after its less-than-stellar showing in the Fed stress test, while other banks rushed to return capital to shareholders.

Apple Inc. (NASDAQ:AAPL) looked like a stock that couldn’t lose, while Bank of America Corp (NYSE:BAC)… well, was Bank of America: the stock so many love to hate. But since October, these stocks have switched places. Could the formerly scorned bank now be a better investment than the once-hot tech superstar?

BAC data by YCharts.

There’s no magic metric that can answer this question once and for all. With literally hundreds of data points available for comparison, let’s look at a few to see who comes out on top.

Valuation
Based on P/E ratio, Apple Inc. (NASDAQ:AAPL) wins by a landslide, trading at around 10 times earnings. Bank of America Corp (NYSE:BAC) shows its struggles over the past year; its reduced earnings expanded its P/E to almost 50. If we can believe the analysts’ and companies’ earnings forecasts, the gap between these numbers should narrow going forward, with Apple checking in at 8.6 times earnings and B of A at 9.2.

But price-to-earnings ratios don’t tell the whole story, and each balance sheet shows hidden value. Bank of America, the second-largest bank based on total assets, is currently trading at a 46% discount to book value. Apple Inc. (NASDAQ:AAPL), on the other hand, has a $137 billion cash hoard that it’s reluctant to part with, its year-old dividend notwithstanding. Though I like dividends as much as the next guy, the deep discount of B of A is slightly too enticing at this point, and its annual dividend will surely be more than $0.04 per share before too long.

Management
Bank of America CEO Brian Moynihan wasn’t in charge when Bank of America Corp (NYSE:BAC) truly descended into madness with its acquisition of Countrywide, but he has done an admirable job extricating the bank from billions in bad loans related to the acquisition. Nevertheless, the bank is still facing billions of dollars in potential liabilities before it is completely out of hot water.

Tim Cook has done a great job as Apple Inc. (NASDAQ:AAPL)’s CEO after taking over for the late Steve Jobs, but his honeymoon period could be coming to an end. Apple hasn’t truly released a new product since Jobs’ death — just upgrades — and the iPad Mini is a device that Jobs probably would have never released. Still, Apple and its products have a devout following, and the company still has little problem selling billions of devices every time it brings something to the market.