2024-03-26 00:26:03 ET
Summary
- Bank of America's Series L preferreds have risen since I last wrote about them. The yield is down to 6%.
- That's still a much better yield than you'll find on most assets today.
- On the other hand, Bank of America's common equity has truly rallied and is now pricier than it once was.
- In this article, I will explore Bank of America and its 6% yield preferreds, comparing them side by side so you can decide which is the better investment.
- My ultimate conclusion may surprise long-term readers, so be sure to read all the way to the end.
Bank of America ( BAC ) has been on a fantastic run in recent months. Since hitting a low of $25.5 in October 2023, it has gained 47%, outperforming the S&P 500 in the same period. Bank of America got hit by two separate headwinds in 2023: the Spring banking crisis and the Autumn treasury yield panic. In the Spring Crisis, Silicon Valley Bank and First Republic both collapsed when their depositors fled and the banks didn’t have enough liquid assets to pay them back. When SVB and First Republic were collapsing, the banking sector as a whole was selling off–big banks and regionals alike. Even after news came out that the big banks were gaining deposits from the failing regionals, the former kept selling off with the latter–albeit to a lesser degree....
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For further details see:
Bank of America 6% Yield Preferreds - Upgrading To Strong Buy