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Wednesday, 12/12/2001

BAC - Bank of America

Company Description

Bank of America Corp. is a bank and financial holding company. Through its banking subsidiaries and various non-banking subsidiaries, the Company provides a diversified range of banking and non-banking financial services and products, primarily throughout the mid-Atlantic, including Maryland, Virginia and the District of Columbia; the Midwest, including Illinois, Iowa, Kansas and Missouri; the southeast, including Florida, Georgia, North Carolina, South Carolina and Tennessee; the southwest, including Arizona, Arkansas, New Mexico, Oklahoma and Texas; the northwest, including, Oregon and Washington; and the west, including California, Idaho and Nevada, and in selected international markets. The Company operates in four business segments: Consumer and Commercial Banking, Asset Management, Global Corporate and Investment Banking and Equity Investments.

(Source: Bank of America)

Reasons To Invest

Several catalysts are converging in shares of Bank of America, which beg a closer look for a long-term position. Perhaps the biggest and most important catalysts at play in the banking sector are the historically low level of the Federal Funds interest rate and the forthcoming economic rebound. The Fed recently lowered its short-term rate for the 11th time this year and left the door open for additional cuts. Meanwhile, the Fed's earlier rate cuts appear to be filtering through the economy. A sufficient amount of liquidity has been injected into the financial system and fiscal stimuli are adding to the prospects of an economic rebound in the U.S. next year. As the economy rebounds so too will Bank of America's business lines.

The macro catalysts are in place for Bank of America to sail into next year. On a micro level, there are several additional catalysts specific to the company. It recently announced a 130 million share stock buyback program. The company previously announced a 100 million share buyback, so the recent approval for another 130 million shares amounts to a significant chunk of stock. The buyback programs will add stability to the stock price as well as help to return excess capital to shareholders over the long-run.

The company recently set forth its growth goals for next year, and elaborated on its new business strategies focused around the consumer and small business segments of the banking market. Bank of America also elaborated on its asset management and investment banking business lines, both of which are expected to add to the bottom-line next year with a rebounding economy.

In the meantime, the stock pays a chunky dividend, which currently yields about 3.84 percent. With money funds yielding a one handle, the big dividend yield is alone attractive.

DRIP Information:
Shares to Qualify = 1           Accept Foreign Accounts: Yes
Auto-reinvestment = Yes         Temper Enrollment Serv:  Yes

Min/Max Investment = $50 to $120,000/year
Reinvestment Fees: 
Dividend: 0   Cash: 0  Auto ReInvest: 0

Transfer Agent:

ChaseMellon

1-800-642-9855

Industry Group:   Internet/Media  52-week high=$65.54
Annual Dividend Per Share=  2.40  52-week low =$40.81
Last earnings 10/15     est=1.25  actual=1.28
Next earnings 01-15     est=1.25  versus=0.85
                                  P/E =  16.63
Analyst Ratings:
Strong Buy    = 11
Moderate Buy  =  5
Hold          =  9
Moderate Sell =  1
Strong Sell   =  1

 
 

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