Comprehensive Stock Comparison
Compare Bank of America Corporation (BAC) vs Royal Bank of Canada (RY) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | RY | 2.1% revenue growth vs BAC's -1.9% |
| Value | RY | Lower P/E (10.6x vs 11.5x) |
| Quality / Margins | BAC | 16.2% net margin vs RY's 14.8% |
| Stability / Safety | RY | Beta 0.56 vs BAC's 0.99 |
| Dividends | BAC | 2.5% yield, 6-year raise streak, vs RY's 2.7% |
| Momentum (1Y) | RY | +45.3% vs BAC's +10.4% |
| Efficiency (ROA) | BAC | 0.9% ROA vs RY's 0.9%, ROIC 3.2% vs 2.0% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Bank of America is one of the world's largest financial institutions providing comprehensive banking and financial services to consumers, businesses, and institutions. It generates revenue primarily through net interest income from its massive loan portfolio — about 60% of total revenue — supplemented by fees from investment banking, wealth management, and trading activities. The company's key advantage is its massive scale and nationwide branch network — the second-largest in the U.S. — which creates a stable deposit base and cross-selling opportunities across its diverse financial services ecosystem.
Royal Bank of Canada is a diversified financial services institution operating primarily in Canada and internationally. It generates revenue mainly through personal and commercial banking (roughly 50% of earnings), wealth management, capital markets, and insurance services. The bank's competitive advantage lies in its dominant Canadian retail banking franchise — the largest in the country — supported by extensive branch networks and long-standing customer relationships.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Segment breakdown not available.
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
RY leads in 3 of 6 categories (Financial Metrics, Total Returns). BAC leads in 2 (Valuation Metrics, Profitability & Efficiency). 1 tied.
Financial Metrics (TTM)
BAC and RY operate at a comparable scale, with $188.8B and $137.4B in trailing revenue. Profitability is closely matched — net margins range from 16.2% (BAC) to 14.8% (RY).
| Metric | BACBank of America C… | RYRoyal Bank of Can… |
|---|---|---|
| RevenueTrailing 12 months | $188.8B | $137.4B |
| EBITDAEarnings before interest/tax | $36.6B | $28.7B |
| Net IncomeAfter-tax profit | $30.6B | $20.4B |
| Free Cash FlowCash after capex | $12.6B | $53.0B |
| Gross MarginGross profit ÷ Revenue | +55.4% | +45.3% |
| Operating MarginEBIT ÷ Revenue | +18.5% | +18.7% |
| Net MarginNet income ÷ Revenue | +16.2% | +14.8% |
| FCF MarginFCF ÷ Revenue | +6.7% | +38.6% |
| Rev. Growth (YoY)Latest quarter vs prior year | — | — |
| EPS Growth (YoY)Latest quarter vs prior year | +18.3% | +28.9% |
Valuation Metrics
At 13.0x trailing earnings, BAC trades at a 20% valuation discount to RY's 16.2x P/E. Adjusting for growth (PEG ratio), BAC offers better value at 0.85x vs RY's 1.30x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | BACBank of America C… | RYRoyal Bank of Can… |
|---|---|---|
| Market CapShares × price | $379.2B | $234.2B |
| Enterprise ValueMkt cap + debt − cash | $513.3B | $780.4B |
| Trailing P/EPrice ÷ TTM EPS | 13.04x | 16.24x |
| Forward P/EPrice ÷ next-FY EPS est. | 11.52x | 10.58x |
| PEG RatioP/E ÷ EPS growth rate | 0.85x | 1.30x |
| EV / EBITDAEnterprise value multiple | 14.02x | 37.17x |
| Price / SalesMarket cap ÷ Revenue | 2.01x | 2.33x |
| Price / BookPrice ÷ Book value/share | 1.24x | 2.32x |
| Price / FCFMarket cap ÷ FCF | 30.07x | 6.05x |
Profitability & Efficiency
RY delivers a 14.6% return on equity — every $100 of shareholder capital generates $15 in annual profit, vs $10 for BAC. BAC carries lower financial leverage with a 1.21x debt-to-equity ratio, signaling a more conservative balance sheet compared to RY's 6.00x. On the Piotroski fundamental quality scale (0–9), BAC scores 7/9 vs RY's 6/9, reflecting strong financial health.
| Metric | BACBank of America C… | RYRoyal Bank of Can… |
|---|---|---|
| ROE (TTM)Return on equity | +10.1% | +14.6% |
| ROA (TTM)Return on assets | +0.9% | +0.9% |
| ROICReturn on invested capital | +3.2% | +2.0% |
| ROCEReturn on capital employed | +4.2% | +3.5% |
| Piotroski ScoreFundamental quality 0–9 | 7 | 6 |
| Debt / EquityFinancial leverage | 1.21x | 6.00x |
| Net DebtTotal debt minus cash | $134.1B | $747.6B |
| Cash & Equiv.Liquid assets | $231.8B | $87.4B |
| Total DebtShort + long-term debt | $365.9B | $835.0B |
| Interest CoverageEBIT ÷ Interest expense | 0.44x | 0.36x |
Total Returns (with DRIP)
A $10,000 investment in RY five years ago would be worth $21,571 today (with dividends reinvested), compared to $15,219 for BAC. Over the past 12 months, RY leads with a +45.3% total return vs BAC's +10.4%. The 3-year compound annual growth rate (CAGR) favors RY at 21.0% vs BAC's 15.5% — a key indicator of consistent wealth creation.
| Metric | BACBank of America C… | RYRoyal Bank of Can… |
|---|---|---|
| YTD ReturnYear-to-date | -10.9% | -1.4% |
| 1-Year ReturnPast 12 months | +10.4% | +45.3% |
| 3-Year ReturnCumulative with dividends | +54.0% | +77.2% |
| 5-Year ReturnCumulative with dividends | +52.2% | +115.7% |
| 10-Year ReturnCumulative with dividends | +355.5% | +295.9% |
| CAGR (3Y)Annualised 3-year return | +15.5% | +21.0% |
Risk & Volatility
RY is the less volatile stock with a 0.56 beta — it tends to amplify market swings less than BAC's 0.99 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. RY currently trades 94.9% from its 52-week high vs BAC's 86.6% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | BACBank of America C… | RYRoyal Bank of Can… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.99x | 0.56x |
| 52-Week HighHighest price in past year | $57.55 | $176.19 |
| 52-Week LowLowest price in past year | $33.07 | $106.10 |
| % of 52W HighCurrent price vs 52-week peak | +86.6% | +94.9% |
| RSI (14)Momentum oscillator 0–100 | 45.6 | 49.2 |
| Avg Volume (50D)Average daily shares traded | 30.7M | 1.2M |
Analyst Outlook
Wall Street rates BAC as "Buy" and RY as "Hold". Consensus price targets imply 21.1% upside for BAC (target: $60) vs -25.3% for RY (target: $125). For income investors, RY offers the higher dividend yield at 2.73% vs BAC's 2.54%.
| Metric | BACBank of America C… | RYRoyal Bank of Can… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Hold |
| Price TargetConsensus 12-month target | $60.33 | $124.85 |
| # AnalystsCovering analysts | 53 | 29 |
| Dividend YieldAnnual dividend ÷ price | +2.5% | +2.7% |
| Dividend StreakConsecutive years of raises | 6 | 2 |
| Dividend / ShareAnnual DPS | $1.27 | $6.24 |
| Buyback YieldShare repurchases ÷ mkt cap | +5.7% | +4.2% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Bank of America Cor… (BAC) | 100 | 183.96 | +84.0% |
| Royal Bank of Canada (RY) | 100 | 219.72 | +119.7% |
Royal Bank of Canada (RY) returned +116% over 5 years vs Bank of America Cor… (BAC)'s +52%. A $10,000 investment in RY 5 years ago would be worth $21,571 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Bank of America Cor… (BAC) | $93.7B | $188.8B | +101.5% |
| Royal Bank of Canada (RY) | $46.0B | $137.4B | +198.7% |
Bank of America Corporation's revenue grew from $93.7B (2016) to $188.8B (2025) — a 8.1% CAGR. Royal Bank of Canada's revenue grew from $46.0B (2016) to $137.4B (2025) — a 12.9% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Bank of America Cor… (BAC) | 19.0% | 16.2% | -14.7% |
| Royal Bank of Canada (RY) | 22.6% | 14.8% | -34.5% |
Bank of America Corporation's net margin went from 19% (2016) to 16% (2025). Royal Bank of Canada's net margin went from 23% (2016) to 15% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Bank of America Cor… (BAC) | 18.9 | 14.4 | -23.8% |
| Royal Bank of Canada (RY) | 10.8 | 12.1 | +12.0% |
Bank of America Corporation has traded in a 9x–19x P/E range over 9 years; current trailing P/E is ~13x. Royal Bank of Canada has traded in a 8x–12x P/E range over 9 years; current trailing P/E is ~16x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Bank of America Cor… (BAC) | 1.5 | 3.82 | +154.7% |
| Royal Bank of Canada (RY) | 6.78 | 14.09 | +107.8% |
Bank of America Corporation's EPS grew from $1.50 (2016) to $3.82 (2025) — a 11% CAGR. Royal Bank of Canada's EPS grew from $6.78 (2016) to $14.09 (2025) — a 8% CAGR.
Chart 6Free Cash Flow — 5 Years
Bank of America Corporation generated $13B FCF in 2025 (+275% vs 2021). Royal Bank of Canada generated $53B FCF in 2025 (-10% vs 2021).
BAC vs RY: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is BAC or RY a better buy right now?
Bank of America Corporation (BAC) offers the better valuation at 13.0x trailing P/E (11.5x forward), making it the more compelling value choice. Analysts rate Bank of America Corporation (BAC) a "Buy" — based on 53 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — BAC or RY?
On trailing P/E, Bank of America Corporation (BAC) is the cheapest at 13.0x versus Royal Bank of Canada at 16.2x. On forward P/E, Royal Bank of Canada is actually cheaper at 10.6x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Bank of America Corporation wins at 0.75x versus Royal Bank of Canada's 0.85x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — BAC or RY?
Over the past 5 years, Royal Bank of Canada (RY) delivered a total return of +115.7%, compared to +52.2% for Bank of America Corporation (BAC). A $10,000 investment in RY five years ago would be worth approximately $22K today (assuming dividends reinvested). Over 10 years, the gap is even starker: BAC returned +355.5% versus RY's +295.9%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — BAC or RY?
By beta (market sensitivity over 5 years), Royal Bank of Canada (RY) is the lower-risk stock at 0.56β versus Bank of America Corporation's 0.99β — meaning BAC is approximately 78% more volatile than RY relative to the S&P 500. On balance sheet safety, Bank of America Corporation (BAC) carries a lower debt/equity ratio of 121% versus 6% for Royal Bank of Canada — giving it more financial flexibility in a downturn.
05Which has better profit margins — BAC or RY?
Bank of America Corporation (BAC) is the more profitable company, earning 16.2% net margin versus 14.8% for Royal Bank of Canada — meaning it keeps 16.2% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: RY leads at 18.7% versus 18.5% for BAC. At the gross margin level — before operating expenses — BAC leads at 55.4%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is BAC or RY more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Bank of America Corporation (BAC) is the more undervalued stock at a PEG of 0.75x versus Royal Bank of Canada's 0.85x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Royal Bank of Canada (RY) trades at 10.6x forward P/E versus 11.5x for Bank of America Corporation — 0.9x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for BAC: 21.1% to $60.33.
07Which pays a better dividend — BAC or RY?
All stocks in this comparison pay dividends. Royal Bank of Canada (RY) offers the highest yield at 2.7%, versus 2.5% for Bank of America Corporation (BAC).
08Is BAC or RY better for a retirement portfolio?
For long-horizon retirement investors, Royal Bank of Canada (RY) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.56), 2.7% yield, +295.9% 10Y return). Both have compounded well over 10 years (RY: +295.9%, BAC: +355.5%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between BAC and RY?
Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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