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The AES Corporation (AES) vs Bank of America Corporation (BAC): Which Is the Better Buy in 2026?

As of 2026-09-17, AES is overvalued at $15, with a DCF intrinsic value of $0 and a margin of safety of -100%. BAC is undervalued at $58, with an intrinsic value of $142 and a margin of safety of 59%. Of the two, BAC has the wider margin of safety.

AES
The AES Corporation
$14.84
VS
BAC
Bank of America Corporation
$57.59

Rewards

AES
  • ★Each dollar of retained earnings has created $11.47 of earning power — management is an exceptional capital allocator.
  • ★Trailing P/E of 5.6x is 76% below the historical average of 22.9x — potentially undervalued relative to its own history.
  • ★PEG ratio of 0.81 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
BAC
  • ★Bank of America Corporation scores 100/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
  • ★PEG ratio of 0.90 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.

Risks

AES
  • ⚠Gross margin of 20.3% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠High leverage (2.42x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
  • ⚠Net debt/EBITDA of 7.6x indicates heavy leverage — it would take over 4 years of EBITDA to pay off net debt.
BAC
  • ⚠Gross margin of 0.0% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠Altman Z-Score of 0.22 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.

Key Valuation Metrics

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AES
BAC
Valuation
$-3.09B
Free Cash Flow
N/A
-29.19%
FCF Yield
N/A
5.56
Trailing P/E
13.30
6.26
Forward P/E
10.88
Quality & Moat
4.21%
ROIC
4.37%
9.57%
ROE
11.20%
20.27%
Gross Margin
0.00%
0.81
PEG Ratio
0.90
Balance Sheet Safety
2.42
Net Debt / Equity
N/A
N/A
Interest Coverage
N/A
7.64
Net Debt / EBITDA
N/A
4.75%
Dividend Yield
2.21%
AES: 5Ties: 2BAC: 1
AESBAC

Historical Fundamentals

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AES

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

BAC

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

$1 Retained Earnings Test

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AES
$-6.40
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$1.41B
Δ Market Cap
$-9.02B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
BAC
$2.37
created per $1 retained over 3 years
Exceptional Value Creator
Σ Retained
$55.63B
Δ Market Cap
+$131.83B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Discounted Cash Flow (DCF) Analysis

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AES
Insufficient Data
Enter initial FCF to calculate intrinsic value
Current Price: $14.84
Fair Value: $0.00
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
BAC
59.5% Margin of Safety
Price is 59.5% below estimated fair value
Current Price: $57.59
Fair Value: $142.10
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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AES

Requires positive FCF to compute implied growth rate.

BAC

Requires positive FCF to compute implied growth rate.

Economic Moat Score

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AES
38/100
No Moat
70+ Wide · 40-69 Narrow · <40 None

No durable moat detected, though revenue predictability shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.
BAC
100/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat driven primarily by revenue predictability. Reinvestment Efficiency is the area most vulnerable to competitive pressure.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

Forensic Accounting

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AES
-2.73
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
BAC
-2.31
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Ownership Breakdown

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AES
Insiders 0.6%Institutions 91.6%Retail & Other 7.8%
No. of Institutional Holders955
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
BAC
Insiders 7.0%Institutions 71.3%Retail & Other 21.7%
No. of Institutional Holders4,542
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

Insider Buying Activity

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AES
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises
BAC
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises

Open market purchases · includes direct & indirect ownership · excludes option exercises.

Insider Selling Activity

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AES
0
Sells (3M)
0
Sells (12M)
No open market insider sales found.
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
BAC
0
Sells (3M)
5
Sells (12M)
Total value (12M): $20.17M
MENSAH BERNARD AMPONSAH
Officer
$4.41M
@ $46.94 · 2026-03-12
BRONSTEIN SHERI B
Officer
$2.99M
@ $49.91 · 2026-03-05
SCRIVENER THOMAS M
Officer
$2.49M
@ $49.82 · 2026-03-05
ATHANASIA DEAN C
President
$6.86M
@ $50.21 · 2026-03-03
BORTHWICK ALASTAIR M.
Chief Financial Officer
$3.42M
@ $50.24 · 2026-02-27
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

🎭 Mr. Market's Mood

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AES
FearGreed
😐Neutral(60/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
BAC
FearGreed
😐Neutral(53/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

⚖️ Buffett Signal

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AES
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (60)
BAC
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (53)
View AES Full AnalysisView BAC Full Analysis

Frequently Asked Questions: AES vs BAC

Is The AES Corporation or Bank of America Corporation more undervalued in 2026?▼

Based on our discounted cash flow model, BAC trades at a 59.5% margin of safety (intrinsic value $142 vs. price $58), compared to AES's -100.0% margin of safety (intrinsic $0 vs. $15).

Which stock has a wider economic moat, The AES Corporation or Bank of America Corporation?▼

BAC scores 100/100 (Wide moat), while AES scores 38/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Is Bank of America Corporation in financial distress?▼

BAC's Altman Z-Score of 0.2 places it in the Distress zone, signaling elevated bankruptcy risk. AES scores 0.5 (Distress zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.

Which stock has higher return on invested capital, The AES Corporation or Bank of America Corporation?▼

BAC earns 4.4% ROIC versus AES's 4.2%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.

Which dividend is safer, The AES Corporation's or Bank of America Corporation's?▼

BAC's dividend earns a safety score of 79/100 (Safe), compared to AES's 69/100 (Safe). BAC has raised its dividend for 3 consecutive years.