1st Source (NASDAQ:SRCE – Get Free Report) and Bank of America (NYSE:BAC – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.
Earnings and Valuation
This table compares 1st Source and Bank of America”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| 1st Source | $600.00 million | 3.50 | $158.28 million | $6.52 | 13.38 |
| Bank of America | $191.57 billion | 2.29 | $30.51 billion | $4.36 | 14.37 |
Risk and Volatility
1st Source has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations and price targets for 1st Source and Bank of America, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| 1st Source | 0 | 2 | 2 | 1 | 2.80 |
| Bank of America | 0 | 6 | 21 | 0 | 2.78 |
1st Source presently has a consensus price target of $89.67, suggesting a potential upside of 2.79%. Bank of America has a consensus price target of $64.08, suggesting a potential upside of 2.30%. Given 1st Source’s stronger consensus rating and higher probable upside, equities analysts plainly believe 1st Source is more favorable than Bank of America.
Institutional and Insider Ownership
74.5% of 1st Source shares are owned by institutional investors. Comparatively, 70.7% of Bank of America shares are owned by institutional investors. 20.2% of 1st Source shares are owned by insiders. Comparatively, 0.3% of Bank of America shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares 1st Source and Bank of America’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| 1st Source | 28.09% | 12.94% | 1.87% |
| Bank of America | 17.56% | 12.20% | 0.98% |
Dividends
1st Source pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Bank of America pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. 1st Source pays out 27.6% of its earnings in the form of a dividend. Bank of America pays out 29.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 1st Source has increased its dividend for 38 consecutive years and Bank of America has increased its dividend for 11 consecutive years. 1st Source is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
1st Source beats Bank of America on 13 of the 18 factors compared between the two stocks.
About 1st Source
1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.
About Bank of America
Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, non-interest and interest-bearing checking accounts, and investment accounts and products; credit and debit cards; residential mortgages, and home equity loans; and direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment provides investment management, brokerage, banking, and trust and retirement products and services; wealth management solutions; and customized solutions, including specialty asset management services. The Global Banking segment offers lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, short-term investing options, and merchant services; working capital management solutions; debt and equity underwriting and distribution, and merger-related and other advisory services; and fixed-income and equity research, and certain market-based services. The Global Markets segment provides market-making, financing, securities clearing, settlement, and custody services; securities and derivative products; and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1784 and is based in Charlotte, North Carolina.
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