And while it might seem like the bac stock price almost by definition would be too cheap at 1x book, thats not how trading necessarily has played out. Will bank of america stock dip below book value now. Not only is bac trading at a heavy discount to its tangible book value, the tangible. Though the same couldnt be said for its book value per share, which. Total tangible equity is calculated as the total stockholders equity minus preferred stock minus intangible assets. Bofa bac q1 earnings lag, provisions up on coronavirus woes. The term book value is a companys assets minus its liabilities and is sometimes referred to as stockholders equity, owners equity, shareholders equity, or simply equity. Kbws frederick cannon and team dont see a comeback for bank stocks like citigroup c and bank of america bac until they can grow tangible book value per shareand thats at least two years. The market value per share is a forwardlooking measure of what the investment community believes a companys shares are worth. The current price to book ratio for bank of america as of may 25, 2020 is 0.
Moreover, the average excess returns from 2001 to 2011 for the top quintile for price to tangible book value 5. Hence, bank of america corporations price to book ratio for the period was 1. Book value per share stock market definition,meaning. May 07, 20 on a price to tangible book value, bac stacks up well against its competition on a valuation basis, and trades at a bigger discount to tangible book value than all but citibank. What that means is weve figured out what this business would be worth if the business is dead and doesnt do anything in the future at all. Before the third quarter of 2009, bank of america nyse. In theory, a stocks tangible book value per share represents the amount of money an investor would receive for each share if a company were to. Mar 23, 2012 the results are similar to those for the pb ratio backtest the top quintile once again clearly outperformed the market by a significant margin. Apply historical fundamental analysis to find patterns among financial statement drivers such as consolidated income of 29.
What does it mean if a company has a negative tangible. Bank of america bac earnings report, financial results. The book value is essentially the tangible accounting value of a firm compared to the market value that is shown. About book value per share book value, per share, reveals the current state of the company and ignores future growth potential. Bank of america corp price tangible book value chart bac.
The book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders. Check b of a financial statements over time to gain insight into the future company performance. More improvements harder to come by at bank of america. Book value per share is a widely used stock evaluation measure. A tangible book value per share tbvps is a method of valuing a company on a per share basis by measuring its equity after removing any intangible assets. What does it mean if a company has a negative tangible book. Oct 10, 2016 if, for some reason, a company were to cease trading permanently, the people who had put money into the business its shareholders and creditors get their money out by having the assets of the company sold and converted into cash. Fundamental analysis data for bank of america corp bac, including priceearnings ratios and earnings per share, at ally invest. Jul 18, 2017 more improvements harder to come by at bank of america we are maintaining our per share fair value estimate of the narrowmoat firm. Hence, bank of americas price to tangible book ratio of today is 1. Bank of america tangible book value per share bac ycharts.
Mar 09, 2017 in fact, despite the share offering, bank of americas tangible book value per share actually increased by 7% that quarter. Should the company decide to dissolve, the book value per common share indicates the dollar value remaining for common shareholders after all assets are. Heres how investors should value bank of americas stock. Bank of america corporation common stock bac stock. Book value less intangibles is called tangible book. View tangible book value per share for bac access over 100 stock metrics like beta, evebitda, pe10, free cash flow yield, kz index and cash conversion cycle.
Bank of america corporation bac valuation measures. When pro forma net tangible book value per share is adjusted for the additional 3. Bank of americas tangible book value per share for the quarter that ended in dec. The tangible book value per share tbvps shows the amount per share that shareholders would expect if the firm was liquidated today. Bac didnt report its tangible book value per share in its quarterly regulatory filings. Zombie value is the tangible book value of the business per share. Price to book value is a valuation ratio that is measured by stock price book value per share.
Smartfinancial announces results for the fourth quarter 2019. Chase jpm and bank of america bac trade above tangible book. Bank of america price to book ratio 20062020 bac macrotrends. Bank of americas book value per share for the quarter that ended in mar. Book value per share tells investors what a banks, or any stocks, book value is on a pershare basis. Tangible book value per share is the pershare value of a companys equity after removing any intangible assets. The tbv excludes a firms intellectual property, patents, and trademarks because these are intangible assets that cannot be easily sold such as property, plant, and equipment.
How to figure the book value of bank stock finance zacks. Tangible book value per share is calculated as the total tangible equity divided by. Chase jpm and bank of america bac trade above tangible book, which is a hard. Bac stock is trading at a low priceearnings ratio of 7.
Nyq financials, including income statements, growth rates, balance sheets and cash flow information. Bank dividends and book values to come under deep scrutiny. Book value per share financial definition of book value. Price to tangible book value backtest fat pitch financials. Tangible book value tbv is calculated by subtracting intangible assets from the companys book value. Bank of america corporation bac book value per share. Book value per common share is a measure used by owners of common shares in a firm to determine the level of safety associated with each share after all debts are paid accordingly. Bank of america bac has recessionproof book value, says. Find the latest book value per share for bank of america corporation bac. Why did bank of america change its focus to tangible book value. Bank of america corp price tangible book value chart for bac. Find out all the key statistics for bank of america corporation bac, including valuation measures, fiscal year financial statistics, trading record, share statistics and more.
To arrive at this number, subtract liabilities from assets. Tangible book value per share tbvps definition investopedia. Tbv is frequently used to illustrate how much of a. B of a financial statements between 2010 and 2020 bac. Bank of america is one of the worlds leading financial institutions, serving individual consumers, small and middlemarket businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. And while it might seem like the bac stock price almost by definition would be too cheap at 1x book, thats. Anyone using this measure should be aware of two issues, which are.
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