Critical Comparison: Western Alliance Bancorporation (NYSE:WAL) versus Bank of America (NYSE:BAC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank of America	N/A	N/A	N/A
Western Alliance Bancorporation	N/A	N/A	N/A

Valuation and Earnings

This table compares Bank of America and Western Alliance Bancorporation”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of America	N/A	N/A	N/A	$4.21	12.04
Western Alliance Bancorporation	N/A	N/A	N/A	$9.05	8.42

Western Alliance Bancorporation 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.

Insider & Institutional Ownership

70.7% of Bank of America shares are held by institutional investors. Comparatively, 79.2% of Western Alliance Bancorporation shares are held by institutional investors. 0.3% of Bank of America shares are held by company insiders. Comparatively, 2.8% of Western Alliance Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Bank of America and Western Alliance Bancorporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of America	0	6	18	1	2.80
Western Alliance Bancorporation	0	5	11	0	2.69

Bank of America currently has a consensus price target of $62.82, suggesting a potential upside of 23.96%. Western Alliance Bancorporation has a consensus price target of $92.18, suggesting a potential upside of 20.94%. Given Bank of America’s stronger consensus rating and higher possible upside, equities analysts clearly believe Bank of America is more favorable than Western Alliance Bancorporation.

Summary

Bank of America beats Western Alliance Bancorporation on 4 of the 7 factors compared between the two stocks.

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 Western Alliance Bancorporation

Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments. The company offers deposit products, including checking, savings, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts; demand deposits; and treasury management and residential mortgage products and services. It also provides commercial and industrial loan products, such as working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lock box services, courier, and cash management services. Further, the company holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.