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Bank Of America: Buy It Now Before This Ship Sails

Jun. 09, 2020 9:07 PM ETBank of America Corporation (BAC)101 Comments


  • Last month, we suggested buying Bank of America at $21. Since then, the shares have skyrocketed.
  • Yet the bank is still well off its previous highs and offers good value here, given the likely ramp-up in dividends in the next few years.
  • The ship is leaving the docks. If you haven't bought yet, you might want to before it sails.

Written by Sam Kovacs


Just less than one month ago, when Robert and I shared our model "All Weather Dividends Portfolio" on Seeking Alpha, we selected Bank of America (NYSE:BAC) as our All Weather financial stock of choice. At the time, the stock was trading at $21 and yielding over 3.3%. We agreed that I would write an article suggesting that dividend investors should buy BAC at such bargain prices. But, within just a few short weeks, the stock is up 30%.

Such hectic stock market movements might make your head spin. You might think you've missed the boat.

Source: Open Domain

This might have been the case for some of the stocks we suggested buying. Yet BAC was so undervalued when we suggested buying it a month ago that the current price would still warrant a purchase.

BAC has a dividend yield of 2.56% and trades around $28.11. Based on our MAD Scores, BAC has a Dividend Strength score of 93 and a Stock Strength score of 77.

This article will present and discuss the factors which show why I believe that dividend investors should invest in Bank of America.

Source: mad-dividends.com

The V-shaped recovery which most thought was impossible has occurred. Robert and I have been agnostic in so far as the movement of stock prices is concerned. Yes, the stock market is now disconnected from the economy. Yes, overoptimistic expectations are baked into this market. Yes, that frightens us.

Yet we remain committed to being net buyers of stocks in all environments. The trick lies in investing in dividend stocks which fit in nicely to our strategy. (You can read more on our strategy in our article "Dividend Investing For Individuals Like You & Me").

Our approach might confuse some investors, but for those who "get it", it gives

This article was written by

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The Ultimate Service For Investors Who Want To Retire On Dividends.

Hi there! We're Robert & Sam, a dad & son team of dividend investors.

If you're looking for regular analysis of some of the best dividend opportunities, you're in the right place!

We regularly publish articles highlighting high quality companies, with superior management and dividend policies, which are trading at great prices.

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If you want to benefit from all of this, you should seriously consider trying "The Dividend Freedom Tribe", which includes a training course, three model portfolios, weekly in depth analysis, our buy/watch/sell lists, access to MAD Dividends Plus for free, as well as a community of lively dividend investors.

Contributing authors for The Dividend Freedom Tribe include Tomas Andrade Campanini and Mike Zaccardi, CFA, CMT

Analyst’s Disclosure: I am/we are long BAC, VFC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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