Dividends4Life: Bank Of America: Be Fearful When Others Are Greedy

Bank of America (BAC) released second quarter results last week which beat earnings consensus expectations. Bank of America, however, also saw a decline in its net interest income on the back of falling short-term interest rates and further reduced its NII outlook for the remainder of the year. Bank of America currently does not make an attractive value proposition.

It's time to be fearful when investors ignore the warning signs and stocks trade near all-time highs. Bank of America's personal and commercial loan growth is already slowing, and the bank's net interest income continued to decline throughout the quarter. Weak guidance with respect to its net interest margin is also a negative for Bank of America's investment thesis. Investors need to carefully monitor the bank's net charge-off ratio in order to react timely to a deterioration in credit quality. Buying Bank of America with its cyclical earnings near all-time stock market highs is not a smart move, in my opinion. The risks are tilted to the downside from here.

Source: Seeking Alpha

Related Articles:
- 5 Dividend Stocks To Beat The Wall Street Giants
- A Disciplined Approach To Dividend Growth Stocks
- 3 Low Beta, Higher Yielding Dividend Stocks For The Next Downturn
- 6 High-Yield REITs With Growing Dividends
- 26 Income Securities For A Well-Rounded Asset Allocation

________________________________________________________________

0 comments

Post a Comment

Note: Only a member of this blog may post a comment.

Dividend Growth Stocks News

~

Popular Posts Last 30 Days