Banc of California (NYSE:BANC) & Bank of America (NYSE:BAC) Head-To-Head Contrast

Banc of California (NYSE:BANC) and Bank of America (NYSE:BAC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Dividends

Banc of California pays an annual dividend of $0.40 per share and has a dividend yield of 3.1%. Bank of America pays an annual dividend of $0.96 per share and has a dividend yield of 2.4%. Banc of California pays out -12.0% of its earnings in the form of a dividend. Bank of America pays out 33.2% 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. Banc of California is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Banc of California and Bank of America’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banc of California	$227.67 million	8.83	-$1.90 billion	($3.33)	-3.84
Bank of America	$171.91 billion	1.81	$26.52 billion	$2.89	13.76

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

Analyst Recommendations

This is a summary of current ratings and price targets for Banc of California and Bank of America, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banc of California	0	5	3	0	2.38
Bank of America	1	6	11	0	2.56

Banc of California presently has a consensus target price of $16.31, indicating a potential upside of 27.64%. Bank of America has a consensus target price of $39.79, indicating a potential upside of 0.05%. Given Banc of California’s higher probable upside, analysts plainly believe Banc of California is more favorable than Bank of America.

Institutional and Insider Ownership

86.9% of Banc of California shares are held by institutional investors. Comparatively, 70.7% of Bank of America shares are held by institutional investors. 7.4% of Banc of California shares are held by insiders. Comparatively, 0.3% of Bank of America shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Banc of California has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Profitability

This table compares Banc of California and Bank of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banc of California	-29.10%	2.25%	0.19%
Bank of America	13.94%	10.88%	0.89%

Summary

Bank of America beats Banc of California on 10 of the 16 factors compared between the two stocks.

About Banc of California

Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California. The company offers deposit products, such as checking, savings, money market, demand, and time deposits; certificates of deposit; retirement accounts; and safe deposit boxes. It also provides real estate loans to professional developers and real estate investors for the acquisition, construction, refinancing, renovation, and on-going operation of commercial real estate properties; commercial real estate mortgage, residential real estate mortgage, and real estate construction and land loans; commercial loans and leases, such as equipment finance, other asset-based, venture capital, secured business, warehouse, and other lending services; small business administration loans; and consumer loans comprising personal, auto, and other loans, as well as home equity and revolving lines of credit. In addition, the company offers international banking, multi-state deposit, and asset and investment management services, as well as cash and treasury management services; and online, mobile, remote deposit, and telephone banking services. It serves small and middle-market businesses, venture capital firms, non-profit organizations, business owners, entrepreneurs, professionals, and high-net worth individuals. Banc of California, Inc. was founded in 1941 and is headquartered in Los Angeles, California.

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.