By
Morgan Housel
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More Articles
August 6, 2008
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It's been a wild year for Income Investor pick Bank of America (NYSE: BAC ) . After picking up Countrywide, it's now the nation's largest home lender (for better or worse).
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Metric
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Trailing 12 months
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Total revenue (before loan losses)
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$65.79 billion
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Total net income
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$8.59 billion
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Net income per share
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$1.82
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Dividends paid per share
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$2.56
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Share price range
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$18.44 - $52.96
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While B of A has endured a rough couple of quarters, its damage hasn't nearly been as bad as that suffered by Washington Mutual (NYSE: WM ) or Wachovia (NYSE: WB ) . In fact, B of A hasn't recorded a single quarterly loss throughout this credit crunch.
You can thank its diverse business segments for that. B of A is one of the nation's largest credit card issuers (thanks to the 2005 acquisition of MBNA), and it has a booming wealth management division (via its acquisition of U.S. Trust). As real estate continues to muddle along, that diversity will help keep things in order, at least in relative terms.
One big wild card in B of A's portfolio is how the Countrywide acquisition turns out. It barely paid a pittance for Countrywide's assets, but that price was based on the assumption that many of the home loans would turn to dust. Many will, of course, but just two weeks ago, B of A announced in its quarterly earnings that Countrywide should have a positive effect on net income this year. It's still a black box, but if B of A can somehow turn around Countrywide's assets, it'll have a leg up to take on banks whose real estate assets are holding up, such as Wells Fargo (NYSE: WFC ) and US Bancorp (NYSE: USB ) .
What do you think about Bank of America? Our 113,000-strong CAPS community currently gives it three out of five stars -- not too bad, all things considered. We'd love to get your input, and it won't cost you a penny. Join the CAPS community and tell us what you think.
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