Bank of America vs Goldman Sachs Which Is More Lucrative?

Bank of America and Goldman Sachs are two of the most prominent financial institutions in the United States, both boasting long histories and a significant global presence in the world of banking and finance. The stocks of these two companies are closely monitored by investors and analysts alike, as they are considered bellwethers for the overall health of the financial sector. Investors often compare and contrast the performance of Bank of America and Goldman Sachs stocks to make strategic investment decisions based on various factors such as financial stability, growth prospects, and market trends.

Bank of America or Goldman Sachs?

When comparing Bank of America and Goldman Sachs, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Bank of America and Goldman Sachs.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Bank of America has a dividend yield of 2.69%, while Goldman Sachs has a dividend yield of 1.87%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Bank of America reports a 5-year dividend growth of 11.24% year and a payout ratio of 40.07%. On the other hand, Goldman Sachs reports a 5-year dividend growth of 27.23% year and a payout ratio of 36.22%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Bank of America P/E ratio at 16.62 and Goldman Sachs's P/E ratio at 16.07. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Bank of America P/B ratio is 1.32 while Goldman Sachs's P/B ratio is 1.62.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Bank of America has seen a 5-year revenue growth of 0.37%, while Goldman Sachs's is 0.57%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Bank of America's ROE at 8.03% and Goldman Sachs's ROE at 10.23%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $45.58 for Bank of America and $596.16 for Goldman Sachs. Over the past year, Bank of America's prices ranged from $27.42 to $46.52, with a yearly change of 69.65%. Goldman Sachs's prices fluctuated between $323.53 and $607.15, with a yearly change of 87.66%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.