Dodge & Cox Sells 10,055,162 Shares of Bank of America Corporation $BAC

Key Points

• Dodge & Cox reduced its stake in Bank of America by 32.4%, owning 21 million shares worth approximately $876.54 million after selling over 10 million shares during the first quarter.
• Bank of America has announced a new quarterly dividend of $0.28 per share, which is an increase from its previous dividend of $0.26, representing an annualized dividend yield of 2.3%.
• The company is initiating a $40 billion stock repurchase plan, aiming to buy back up to 11.1% of its outstanding shares, which indicates management's belief that the stock may be undervalued.

Dodge & Cox lowered its holdings in Bank of America Corporation (NYSE:BAC - Free Report) by 32.4% in the first quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 21,004,922 shares of the financial services provider's stock after selling 10,055,162 shares during the period. Dodge & Cox owned approximately 0.28% of Bank of America worth $876,535,000 as of its most recent SEC filing.

A number of other hedge funds also recently modified their holdings of the business. Vega Investment Solutions acquired a new position in shares of Bank of America in the fourth quarter worth $30,000. Marshall & Sterling Wealth Advisors Inc. acquired a new position in shares of Bank of America in the fourth quarter worth $31,000. Spurstone Advisory Services LLC acquired a new position in shares of Bank of America in the fourth quarter worth $34,000. Wood Tarver Financial Group LLC acquired a new position in shares of Bank of America in the fourth quarter worth $38,000. Finally, Mascagni Wealth Management Inc. acquired a new position in shares of Bank of America in the fourth quarter worth $40,000. Hedge funds and other institutional investors own 70.71% of the company's stock.

Bank of America Stock Up 2.5%

Bank of America stock traded up $1.2250 during mid-day trading on Friday, hitting $49.4850. 45,055,019 shares of the company's stock were exchanged, compared to its average volume of 33,213,872. The company has a current ratio of 0.80, a quick ratio of 0.79 and a debt-to-equity ratio of 1.14. The stock has a market cap of $366.53 billion, a P/E ratio of 14.47, a P/E/G ratio of 1.92 and a beta of 1.31. Bank of America Corporation has a 1-year low of $33.06 and a 1-year high of $49.66. The stock has a 50 day moving average of $47.06 and a two-hundred day moving average of $43.81.

Bank of America (NYSE:BAC - Get Free Report) last released its quarterly earnings results on Wednesday, July 16th. The financial services provider reported $0.89 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.86 by $0.03. Bank of America had a net margin of 14.81% and a return on equity of 10.25%. The company had revenue of ($22,273.00) million during the quarter, compared to analysts' expectations of $26.79 billion. During the same period in the prior year, the company earned $0.83 earnings per share. The business's quarterly revenue was up 4.3% compared to the same quarter last year. As a group, analysts anticipate that Bank of America Corporation will post 3.7 EPS for the current fiscal year.

Bank of America announced that its board has initiated a share buyback plan on Wednesday, July 23rd that permits the company to buyback $40.00 billion in shares. This buyback authorization permits the financial services provider to purchase up to 11.1% of its stock through open market purchases. Stock buyback plans are usually a sign that the company's board of directors believes its shares are undervalued.

Bank of America Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, September 26th. Shareholders of record on Friday, September 5th will be issued a dividend of $0.28 per share. This represents a $1.12 dividend on an annualized basis and a yield of 2.3%. This is a positive change from Bank of America's previous quarterly dividend of $0.26. The ex-dividend date is Friday, September 5th. Bank of America's dividend payout ratio is currently 30.41%.

Insider Transactions at Bank of America

In other Bank of America news, insider James P. Demare sold 148,391 shares of the company's stock in a transaction dated Friday, August 1st. The shares were sold at an average price of $45.57, for a total transaction of $6,762,177.87. Following the completion of the sale, the insider directly owned 223,407 shares in the company, valued at $10,180,656.99. This represents a 39.91% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 0.30% of the stock is owned by company insiders.

Analyst Ratings Changes

A number of equities analysts have recently weighed in on BAC shares. Oppenheimer upped their price target on shares of Bank of America from $55.00 to $57.00 and gave the stock an "outperform" rating in a research note on Wednesday, July 30th. TD Cowen started coverage on shares of Bank of America in a research note on Thursday, May 15th. They issued a "buy" rating and a $53.00 price target on the stock. Royal Bank Of Canada set a $53.00 price target on shares of Bank of America and gave the stock an "outperform" rating in a research note on Monday, June 30th. Morgan Stanley upped their price objective on shares of Bank of America from $47.00 to $49.00 and gave the stock an "overweight" rating in a report on Monday, June 23rd. Finally, Hsbc Global Res downgraded shares of Bank of America from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, July 8th. Seventeen equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company's stock. According to MarketBeat.com, Bank of America presently has a consensus rating of "Moderate Buy" and an average target price of $50.13.

Bank of America Company Profile

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.