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Reasons To Invest In Bank Of America Corporation

550 Words3 Pages

Investing is a serious matter and requires thorough research. A person should research the product and the background of the company before deciding to invest in the company. The reason being is that when investing in a company a person is taking the risk of either gaining money or losing everything. There are numerous of ways a person can choose to invest. Bonds, stocks, and mutual funds are just a few ways that people can invest. When deciding to invest a person has the opportunity to invest in their own bank. The bank I use is United Services Automobile Association (USAA) and it is not traded on the stock exchange market. Since United Services Automobile Association (USAA) is not on the stock exchange market I will be examining Bank of America. …show more content…

Interest rates, valuation, dividends, and buy backs are just a few reasons for a person to consider purchasing Bank of America Corporation stock. Recently after passing the Federal Reserve stress test in 2016, Bank of America has decided to boost its dividends by 50 percent. After the boost one can find that Bank of America is paying out $0.075 dividends. In addition to the increase in dividends, Bank of America Corporation has been increasing the number of buy backs and plans to continue buy bank shares for the next couple of years. Starting in third quarter of 2016, Bank of America Corporation is planning to purchase an additional $5 billion worth of shares over the next year. (Ashe, 2016) With Bank of America Corporation buying back shares, the price per share has the opportunity to increase. Bank of America Corporation buying back stock will decrease the amount of stock available and increase the price. This is a good sign seeming that Bank of America Corporation has been trading at below value since the 2008 financial crisis. The last reason is that interest rates are rising. Banks tend to make more money when interest rates are raised due to more money being made off of

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