Validea Detailed Fundamental Analysis

Bank of America (BAC) received a 75% rating from Validea's Pim van Vliet Multi-Factor Investor model, which targets low volatility stocks with strong momentum and high net payout yields. While BAC, a large-cap money center bank, passed the model's market cap and standard deviation (low volatility) tests, it scored neutral on momentum and net payout yield, ultimately resulting in a 'FAIL' for its final rank. This rating falls below the 80% threshold typically indicating investment interest, suggesting BAC does not currently align with this specific quantitative factor-based strategy.

Analysis

According to a Validea fundamental report, Bank of America Corp. (BAC) scores 75% on the Pim van Vliet Multi-Factor Investor model, a rating that results in an overall 'FAIL' for the stock under this specific quantitative strategy. The model, which seeks low-volatility stocks with strong momentum and high net payout yields, considers scores below 80% to be of low interest. BAC successfully passes the model's criteria for market capitalization and standard deviation, indicating it exhibits the desired low-volatility characteristics of a large-cap firm. However, the stock fails to meet the other key requirements, registering a 'NEUTRAL' score on both its 'Twelve Minus One Momentum' and 'Net Payout Yield'. This mixed assessment suggests that while BAC aligns with the conservative, low-risk aspect of the strategy, its current lack of strong price momentum and mediocre shareholder return profile makes it an unattractive holding from this multi-factor perspective.

Key Decisions for Investors

• Investors employing quantitative, multi-factor strategies that equally weight volatility, momentum, and yield should note that BAC currently fails to meet the necessary criteria for inclusion based on this specific model.
• While the stock's low-volatility profile may appeal to conservative investors, the neutral signal on its net payout yield warrants a closer look at the company's capital return program relative to peers.
• Traders should monitor for an improvement in BAC's price momentum, as this is a key lagging factor preventing a positive rating from this type of rules-based investment screen.