This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Big Banks: Post-Election Bloody Aftermath Losers

Of course, with the banking industry continuing to earn money and build capital as the economy continues its slow recovery and loan quality improves, investors may be looking at a pull-back opportunity, following a very strong showing this year for most large-cap bank stocks.

The "big four" U.S. banks had a very rough Wednesday.

The financial loser was Bank of America (BAC - Get Report), with shares sliding over 7% to close at $9.23. Bank of America's shares have now returned 67% year-to-date, following an epic 58% decline during 2011. The shares may appear cheap, trading at just 0.7 times their reported Sept. 30 tangible book value of $13.48, but they are the most expensive among the big four to forward earnings. BAC trades for 9.5 times the consensus 2013 earnings estimate of 97 cents a share, among analysts polled by Thomson Reuters. That's a rather costly forward P/E in the current environment for the nation's largest bank stocks, especially when considering Bank of America's uneven earnings performance and legacy mortgage putback risk.

Bank of America currently pays a nominal quarterly dividend of a penny a share. Looking past the fiscal cliff negotiations, investors are hoping for Bank of America to begin returning more significant capital to investors during 2013 following the next round of Federal Reserve stress tests.

Deutsche Bank analyst Matt O'Connor on Tuesday estimated that the company would return a total of $2.981 billion to common shareholders next year, through $1.481 billion in dividends, plus $1.500 billion in share buybacks. The analyst expects Bank of America's 2013 dividend yield on common shares to be 1.3%.

BAC Chart BAC data by YCharts

Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.
2 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $15.71 -0.25%
C $51.54 0.43%
JPM $62.14 0.02%
WFC $52.38 0.36%
AAPL $109.48 -1.20%


Chart of I:DJI
DOW 17,000.38 +88.09 0.52%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,790.0720 -1.08 -0.02%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs