Head to Head Analysis: Bank of America (NYSE:BAC) & Solera National Bancorp (NYSE:SLRK)

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Bank of America (NYSE:BAC) and Solera National Bancorp (OTCMKTS:SLRK) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and target prices for Bank of America and Solera National Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of America 0 11 8 0 2.42
Solera National Bancorp 0 0 0 0 N/A

Bank of America currently has a consensus target price of $32.34, indicating a potential upside of 10.99%. Given Bank of America’s higher probable upside, equities research analysts clearly believe Bank of America is more favorable than Solera National Bancorp.

Profitability

This table compares Bank of America and Solera National Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of America 25.52% 11.95% 1.23%
Solera National Bancorp 30.18% N/A N/A

Dividends

Bank of America pays an annual dividend of $0.72 per share and has a dividend yield of 2.5%. Solera National Bancorp does not pay a dividend. Bank of America pays out 27.6% of its earnings in the form of a dividend. Bank of America has raised its dividend for 5 consecutive years.

Risk and Volatility

Bank of America has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500. Comparatively, Solera National Bancorp has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.

Institutional and Insider Ownership

68.5% of Bank of America shares are held by institutional investors. Comparatively, 1.3% of Solera National Bancorp shares are held by institutional investors. 0.2% of Bank of America shares are held by company insiders. Comparatively, 17.4% of Solera National Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Bank of America and Solera National Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of America $110.58 billion 2.45 $28.15 billion $2.61 11.16
Solera National Bancorp $9.05 million 5.11 $2.23 million N/A N/A

Bank of America has higher revenue and earnings than Solera National Bancorp.

Summary

Bank of America beats Solera National Bancorp on 10 of the 15 factors compared between the two stocks.

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 through 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, CDs and IRAs, noninterest- and interest-bearing checking accounts, and investment accounts and products; and credit and debit cards, residential mortgages, and home equity loans, as well as direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. This segment provides its products and services through approximately 4,300 financial centers; 16,300 ATMs; call centers; and digital banking platforms. The GWIM segment offers investment management, brokerage, banking, and trust and retirement products; and wealth management solutions targeted to high net worth and ultra high net worth clients, as well as customized solutions to meet clients' wealth structuring, investment management, and trust and banking needs, including specialty asset management services. The Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1874 and is headquartered in Charlotte, North Carolina.

About Solera National Bancorp

Solera National Bancorp, Inc. operates as the bank holding company for Solera National Bank that provides commercial and consumer banking services to small and medium-sized businesses, licensed professionals, and individuals in the United States. The company offers deposit products, including checking and savings accounts, and certificates of deposits; and business loan products, such as real estate secured loans, construction loans, small business administration loans, business lines of credit, and equipment financing. It also provides online banking, account analysis, combined account analysis, commercial sweep, remote deposit, ACH origination, payroll direct deposit, merchant, fraud, business debit card, and cash management services. The company was founded in 2006 and is headquartered in Lakewood, Colorado.

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