Bank of America Corp (BAC): Banking, When Do Fundamentals Outweigh Trust?

The truth is, many investors look at Bank of America Corp (NYSE:BAC)’s strong fundamentals and simply think “I’ve heard that before.” Before the collapse, all of the banks looked to have good valuations, good fundamentals, and (especially) good assets, until they didn’t. Since the collapse, all of the mistrusted “too big to fail” banks have made huge acquisitions and become larger and, to some extent, harder to value.

Wells Fargo & Co (NYSE:WFC) and US Bank never abused the public’s trust. These banks seem to be simpler to understand, and they pay higher dividends (just under 3%) than a BAC. Investors feel there is a safety, and a trust, factor, so these banks get the benefit of the doubt. Despite that safety, I would argue that Bank of America Corp (NYSE:BAC) has a better portfolio and more upside than any banking stock.

The key question for investors is, has Bank of America changed? Does it deserve investors’ trust?

Because if it has changed, it’s simply one of the best values available today.

Adem Tahiri has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America and Wells Fargo.

The article Banking: When Do Fundamentals Outweigh Trust? originally appeared on Fool.com.

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