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Bank of America Corporation (BAC) vs Brown-Forman Corporation (BF-B): Which Is the Better Buy in 2026?

As of 2026-11-02, BAC is undervalued at $50, with a DCF intrinsic value of $180 and a margin of safety of 72%. BF-B is overvalued at $29, with an intrinsic value of $19 and a margin of safety of -50%. Of the two, BAC has the wider margin of safety.

BAC
Bank of America Corporation
$50.01
VS
BF-B
Brown-Forman Corporation
$28.71

Rewards

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 0.91 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
BF-B
  • ★Brown-Forman Corporation has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
  • ★Gross margin of 60.7% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Brown-Forman Corporation scores 87/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.

Risks

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.
BF-B
  • ⚠FCF yield of 6.8% suggests reasonable valuation assuming continued moderate growth.
  • ⚠PEG ratio of 2.19 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.

Key Valuation Metrics

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BAC
BF-B
Valuation
N/A
Free Cash Flow
$893.00M
N/A
FCF Yield
6.78%
11.94
Trailing P/E
18.52
9.64
Forward P/E
16.75
Quality & Moat
3.80%
ROIC
13.29%
10.73%
ROE
18.12%
0.00%
Gross Margin
60.66%
0.91
PEG Ratio
2.19
Balance Sheet Safety
N/A
Net Debt / Equity
0.54
N/A
Interest Coverage
N/A
N/A
Net Debt / EBITDA
1.80
2.56%
Dividend Yield
3.22%
BAC: 3Ties: 1BF-B: 4
BACBF-B

Historical Fundamentals

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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.

BF-B

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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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
BF-B
$-30.63
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$1.36B
Δ Market Cap
$-41.56B
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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BAC
72.2% Margin of Safety
Price is 72.2% below estimated fair value
Current Price: $50.01
Fair Value: $180.08
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
BF-B
49.6% Overvalued
Price is 49.6% above estimated fair value
Current Price: $28.71
Fair Value: $19.19
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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BAC

Requires positive FCF to compute implied growth rate.

BF-B

What growth rate is the market pricing in at $29?

+8.7%
Market-Implied Owner Earnings Growth
Standard FCF implies +5.6%

The market implies +8.7% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +5.6%, reflecting heavy growth investment.

Economic Moat Score

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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.
BF-B
87/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat with strength across all dimensions. Margin Stability is the standout factor.

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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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.
BF-B
-2.64
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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BAC
Insiders 7.1%Institutions 71.9%Retail & Other 21.0%
No. of Institutional Holders4,517
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.
BF-B
Insiders 2.8%Institutions 70.8%Retail & Other 26.4%
No. of Institutional Holders827
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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BAC
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises
BF-B
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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BAC
0
Sells (3M)
5
Sells (12M)
Total value (12M): $20.17M
MENSAH BERNARD AMPONSAH
Officer
$4.41M
@ $46.94 · 2026-03-12
SCRIVENER THOMAS M
Officer
$2.49M
@ $49.82 · 2026-03-05
BRONSTEIN SHERI B
Officer
$2.99M
@ $49.91 · 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
BF-B
0
Sells (3M)
1
Sells (12M)
Total value (12M): $148,335
WHITING LAWSON E
Chief Executive Officer
$148,335
@ $31.00 · 2025-12-04
WHITING LAWSON E
Chief Executive Officer
$732,871
@ $31.00 · 2025-07-23
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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BAC
FearGreed
😨Fear(39/100)

"Market is pessimistic — investigate whether fears are temporary or structural"

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.
BF-B
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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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: Fear (39)
BF-B
⚪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 BAC Full AnalysisView BF-B Full Analysis

Frequently Asked Questions: BAC vs BF-B

Is Bank of America Corporation or Brown-Forman Corporation more undervalued in 2026?▼

Based on our discounted cash flow model, BAC trades at a 72.2% margin of safety (intrinsic value $180 vs. price $50), compared to BF-B's -49.6% margin of safety (intrinsic $19 vs. $29).

Which stock has a wider economic moat, Bank of America Corporation or Brown-Forman Corporation?▼

BAC scores 100/100 (Wide moat), while BF-B scores 87/100 (Wide 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. BF-B scores 4.3 (Safe 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, Bank of America Corporation or Brown-Forman Corporation?▼

BF-B earns 13.3% ROIC versus BAC's 3.8%. 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, Bank of America Corporation's or Brown-Forman Corporation's?▼

BF-B's dividend earns a safety score of 84/100 (Very Safe), compared to BAC's 79/100 (Safe). BF-B has raised its dividend for 3 consecutive years.

BAC vs BF-B: Which Is the Better Buy in 2026? | SafetyMargin.io