Bank of America Isn't the Bargain You Think
At first glance, it looks compelling enough. Shares are priced at less than 10 times this year's projected earnings, and analysts expect about the same per-share profits next year. The dividend yield of 3% is pretty attractive as well. Better still, the big bank's bottom line improved to the tune of 19% year over year in the second quarter of this year, thanks to higher interest rates.
But before you plow into Bank of America (NYSE: BAC) based on its basic valuation measures, you might want to reconsider. As the old investing adage reminds us, some stocks are cheap for a reason.
If you already own a stake in BofA, don't panic. The nation's second-biggest bank (as measured by assets) is hardly doomed.
Source Fool.com
