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Bank Of America: An Income Play With A Kicker
March 23, 2019
- Bank of America should be viewed as an income play because the bank has a healthy dividend and promising dividend growth prospects.
- Investors should, however, not forget that this bank also has great long-term business prospects that should help propel the stock price higher.
- I am long Bank of America and I plan to stay long the stock.
Bank of America's ($BAC) stock has performed well so far in 2019 (up 9%), but BAC shares have significantly underperformed the broader market over the last year.
Financials have been under pressure since mid-2018 due largely to industry-specific factors (low interest rate environment, flattening yield curve, and increasing regulatory concerns), but I view the pullback in BAC shares as a great long-term buying opportunity. BAC has a strong bull case, which includes promising capital return prospects, so I believe that there is a lot to like about BAC shares at today's price.