Head to Head Contrast: Bank of America (NYSE:BAC) vs. Piper Sandler Companies (NYSE:PIPR)

Bank of America (NYSE:BAC) and Piper Sandler Companies (NYSE:PIPR) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Dividends

Bank of America pays an annual dividend of $1.12 per share and has a dividend yield of 2.1%. Piper Sandler Companies pays an annual dividend of $2.80 per share and has a dividend yield of 0.7%. Bank of America pays out 29.2% of its earnings in the form of a dividend. Piper Sandler Companies pays out 21.1% 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. Bank of America has increased its dividend for 11 consecutive years and Piper Sandler Companies has increased its dividend for 1 consecutive years. Bank of America is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

70.7% of Bank of America shares are held by institutional investors. Comparatively, 72.8% of Piper Sandler Companies shares are held by institutional investors. 0.3% of Bank of America shares are held by company insiders. Comparatively, 2.7% of Piper Sandler Companies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Bank of America has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Piper Sandler Companies has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500.

Profitability

This table compares Bank of America and Piper Sandler Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of America	16.23%	11.07%	0.90%
Piper Sandler Companies	13.73%	19.91%	13.64%

Earnings & Valuation

This table compares Bank of America and Piper Sandler Companies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of America	$113.10 billion	3.42	$27.13 billion	$3.83	13.84
Piper Sandler Companies	$1.66 billion	4.03	$181.11 million	$13.27	28.40

Bank of America has higher revenue and earnings than Piper Sandler Companies. Bank of America is trading at a lower price-to-earnings ratio than Piper Sandler Companies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Bank of America and Piper Sandler Companies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of America	0	4	24	1	2.90
Piper Sandler Companies	0	3	2	0	2.40

Bank of America presently has a consensus price target of $59.74, suggesting a potential upside of 12.67%. Piper Sandler Companies has a consensus price target of $392.00, suggesting a potential upside of 4.01%. Given Bank of America’s stronger consensus rating and higher probable upside, analysts plainly believe Bank of America is more favorable than Piper Sandler Companies.

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.

About Piper Sandler Companies

Piper Sandler Companies operates as an investment bank and institutional securities firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. It offers investment banking services and institutional sales, trading, and research services for various equity and fixed income products; advisory services, such as mergers and acquisitions, equity and debt private placements, and debt and restructuring advisory; raises capital through equity and debt financings; underwrites municipal issuances; and municipal financial advisory and loan placement services, as well as various over-the-counter derivative products. It also provides public finance investment banking services that focus on state and local governments, and cultural and social service non-profit entities, as well as the education, healthcare, hospitality, senior living, housing, and transportation sectors. In addition, the company offers equity and fixed income advisory and trade execution services for institutional investors, corporations, and government and non-profit entities. Further, it is involved in the alternative asset management funds merchant banking and healthcare to invest firm capital and to manage capital from outside investors. The company was formerly known as Piper Jaffray Companies and changed its name to Piper Sandler Companies in January 2020. Piper Sandler Companies was founded in 1895 and is headquartered in Minneapolis, Minnesota.