Comparing Bank of America (NYSE:BAC) and Robinhood Markets (NASDAQ:HOOD)

Robinhood Markets (NASDAQ:HOOD) and Bank of America (NYSE:BAC) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Institutional & Insider Ownership

93.3% of Robinhood Markets shares are held by institutional investors. Comparatively, 70.7% of Bank of America shares are held by institutional investors. 14.5% of Robinhood Markets shares are held by insiders. Comparatively, 0.3% of Bank of America shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Robinhood Markets has a beta of 2.43, meaning that its share price is 143% more volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Earnings and Valuation

This table compares Robinhood Markets and Bank of America”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Robinhood Markets	$4.47 billion	15.12	$1.88 billion	$2.06	36.51
Bank of America	$191.57 billion	2.04	$30.51 billion	$3.83	13.94

Bank of America has higher revenue and earnings than Robinhood Markets. Bank of America is trading at a lower price-to-earnings ratio than Robinhood Markets, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Robinhood Markets and Bank of America, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Robinhood Markets	1	6	17	0	2.67
Bank of America	0	4	22	0	2.85

Robinhood Markets currently has a consensus target price of $121.71, suggesting a potential upside of 61.83%. Bank of America has a consensus target price of $60.30, suggesting a potential upside of 12.96%. Given Robinhood Markets’ higher probable upside, equities research analysts plainly believe Robinhood Markets is more favorable than Bank of America.

Profitability

This table compares Robinhood Markets and Bank of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Robinhood Markets	42.10%	22.32%	5.29%
Bank of America	16.23%	11.07%	0.90%

Summary

Robinhood Markets beats Bank of America on 9 of the 14 factors compared between the two stocks.

About Robinhood Markets

Robinhood Markets, Inc. operates financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds (ETFs), American depository receipts, options, gold, and cryptocurrencies. The company offers fractional trading, recurring investments, fully-paid securities lending, access to investing on margin, cash sweep, instant withdrawals, retirement program, around-the-clock trading, and initial public offerings participation services. It also provides various learning and education solutions comprise Snacks, an accessible digest of business news stories for a new generation of investors.; Learn, which is an online collection of beginners' guides, feature tutorials, and financial dictionary; Newsfeeds that offer access to free, premium news from sites from various sites, such as Barron's, Reuters, and Dow Jones. In addition, the company offers In-App Education, a resource that covers investing fundamentals, including why people invest, a stock market overview, and tips on how to define investing goals, as well as allows customers to understand the basics of investing before their first trade; and Crypto Learn and Earn, an educational module available to various crypto customers through Robinhood Learn to teach customers the basics related to cryptocurrency. Further, it provides Robinhood credit cards, cash card and spending accounts, and wallets. Robinhood Markets, Inc. was incorporated in 2013 and is headquartered in Menlo Park, California.

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.