Analyzing Bank of America (NYSE:BAC) & Oppenheimer (NYSE:OPY)

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

Dividends

Oppenheimer pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Bank of America pays an annual dividend of $1.12 per share and has a dividend yield of 2.1%. Oppenheimer pays out 9.7% of its earnings in the form of a dividend. Bank of America pays out 30.5% 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. Oppenheimer has raised its dividend for 1 consecutive years and Bank of America has raised its dividend for 11 consecutive years. Bank of America is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Oppenheimer and Bank of America”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oppenheimer	$1.54 billion	0.46	$71.56 million	$7.45	9.03
Bank of America	$107.26 billion	3.58	$27.13 billion	$3.67	14.32

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

Analyst Ratings

This is a summary of recent recommendations for Oppenheimer and Bank of America, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oppenheimer	0	0	1	0	3.00
Bank of America	0	5	23	0	2.82

Bank of America has a consensus target price of $57.86, suggesting a potential upside of 10.07%. Given Bank of America’s higher probable upside, analysts plainly believe Bank of America is more favorable than Oppenheimer.

Volatility & Risk

Oppenheimer has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Institutional and Insider Ownership

32.3% of Oppenheimer shares are held by institutional investors. Comparatively, 70.7% of Bank of America shares are held by institutional investors. 34.3% of Oppenheimer shares are held by company insiders. Comparatively, 0.3% of Bank of America 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.

Profitability

This table compares Oppenheimer and Bank of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oppenheimer	5.88%	10.13%	2.50%
Bank of America	15.70%	10.76%	0.88%

Summary

Bank of America beats Oppenheimer on 12 of the 17 factors compared between the two stocks.

About Oppenheimer

Oppenheimer Holdings Inc. operates as a middle-market investment bank and full-service broker-dealer in the Americas, Europe, the Middle East, and Asia. The company provides brokerage services covering corporate equity and debt securities, money market instruments, exchange-traded options and futures contracts, municipal bonds, mutual funds, exchange-traded funds, and unit investment trusts; financial and wealth planning services; and margin lending services. It offers asset management services, including separately managed accounts, mutual fund managed accounts, discretionary portfolio management programs, non-discretionary investment advisory and consultation services, alternative investments, portfolio enhancement programs, and institutional taxable fixed income portfolio management strategies and solutions, as well as taxable and non-taxable fixed income portfolios and strategies. In addition, the company offers investment banking services, such as strategic advisory services and capital markets products; merger and acquisition, equities capital market, debt capital market, debt advisory and restructuring, and fund placement services; and institutional equity sales and trading, equity research, equity derivatives and index options, convertible bonds, event driven sales and trading, and portfolio and electronic trading. Further, it provides institutional fixed income sales and trading, fixed income research, public finance, and municipal trading services; and proprietary trading and investment activities. Additionally, the company offers underwriting, market-making, trust, and discount services, as well as a cloud-based financial market. It serves high-net-worth individuals and families, corporate executives, public and private businesses, institutions and corporations, governments, financial sponsors, and domestic and international investors. Oppenheimer Holdings Inc. was founded in 1881 and is headquartered in New York, New York.

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.