Investor Stock Analysis

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  • Topic: Bank, Finance, Private banking
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  • Published : May 3, 2013
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INVESTOR STOCK ANALYSIS
University of Phoenix
Fin 571
April 22, 2013

Bank of America and SunTrust are competitors in the banking industry. Aside from the obvious similtaries inherent to the banking business, these two companies are different when viewed through a financial perspective. Both companies operates in three segments: Consumer Banking and Private Wealth Management, Wholesale Banking, and Mortgage Banking. SunTrust Banks has a market cap of $14.81 billion and is part of the financial sector. Bank of America market cap is 126.19 billion. In order to evaluate the two companies, I have prepared a common size financial statement along with computed key ratios. Base on my analysis of the two companies, I can determine which company’s stock has long-term wealth creation. By the end of the day trading, I identified on April 19, 2013, that Bank of America stock fell to -0.0.3(-0.26) to 11.63 on average volume, while Sun Trust Bank stock fell to -0.26(-0.92) to 28.05 on average volume. The P/E for Bank of America is 27.11 and SunTrust P/E is 7.2. Both companies’ strengths can be viewed in multiple areas, such as its profits growth, solid stock price performance, attractive valuation levels, expanding profit margins and compelling growth in net income. Although the companies’ may harbor some minor weaknesses, I feel they are unlikely to have a significant impact on results. Base on the information provided, SunTrust Bank would have a long term- wealth creation for investors.
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