The slideshow walks viewers through an analysis of Bank of America's stock.

1. Bank of America
An Owner's Manual for Investors

2. you're entitled to a share of its earnings.
As an owner of Bank of America's stock

3. NOT TO SCALE
obviously
$16.3
Billion
B of A's
12-Month
Earnings
B of A's
Earnings
Per Share
$1.35

4. If you divide B of A's share price by
its earnings per share (EPS), you get
its price-to-earnings ratio.

5. P/E
Ratio
=
Share Price
EPS
12.97=
$17.49
$1.35
=
This is how much it costs to buy $1
of B of A's annual earnings.

6. A higher P/E ratio implies a lower
potential return.

7. 1
10
100
1,000
100 Biggest S&P Companies
P/ERatio
Most companies have P/E ratios
between 12 and 30.
What Is a Typical Stock's P/E Ratio?

8. You can also use Bank of America's
P/E ratio to derive its earnings yield.

9. 1
12.97 7.7%
B of A's
Earnings
Yield
1
P/E Ratio
= ==

10. This helps you compare a stock
to other types of investments,
such as bonds and real estate.

11. 7.69%
6.63%
4.33%
2.90%
2.45%2.21%
B of A's
Earnings
Yield
Class A
Office
Building
Cap Rate
S&P 500
Earnings
Yield
10-Year
AAA Corp.
Bonds
5-Year
CDs
10-Year
Treasuries
Average Rates of Return

12. Of course, if you own one share of
Bank of America stock, you don't
get a check each year for its EPS.

13. You receive quarterly dividends
instead, which typically account
for only a portion of total earnings.

14. 22%
B of A's Payout Ratio
The payout ratio is the percentage of earnings
paid as dividends. Anywhere from 30% to
70% is normal.

15. 1.14%Bank of America's Dividend Yield

16. B of A's
Dividend
Yield
=
Dividend
per Share
Share
Price
=
$0.20
$17.49
= 1.14%

17. You can then use this to compare
stocks based on their income-
generating potential.

18. 1.14%
3.70%
3.30%
2.75%
1.67%
0.71%
B of A Exxon Wal-Mart Wells
Fargo
Comcast Visa
Representative Dividend Yields

19. B of A also buys back its own stock.

20. This reduces its share count, which
increases the ownership interest
of each remaining share.

21. $1.6
Billion
-0.7%
B of A's
Buybacks
(TTM)
Change in B of
A's Share
Count (TTM)

22. Bank of America's stock?
So, what does the future hold for

23. B of A
-51%
S&P 500
116%
-100%
-50%
0%
50%
100%
150%
Today20132011200920072005
If the Past Is Prologue...
Total return since Jan. 1, 2005

24. Bank of America's earnings to grow.
While it's impossible to predict the
future with precision, analysts expect

25. $1.43
$1.56
Current Fiscal Year Next Fiscal Year
Average Earnings per Share Estimate Among Wall
Street Analysts
Divining Bank of America's Future

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