Compare Stocks › BAC vs COST

Bank of America Corporation (BAC) vs Costco Wholesale Corporation (COST): Which Is the Better Buy in 2026?

As of 2026-06-19, BAC is undervalued at $56, with a DCF intrinsic value of $133 and a margin of safety of 58%. COST is overvalued at $951, with an intrinsic value of $451 and a margin of safety of -111%. Of the two, BAC has the wider margin of safety.

BAC

Bank of America Corporation

$56.20

COST

Costco Wholesale Corporation

$951.45

Rewards

BAC

★Bank of America Corporation scores 100/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.

COST

★Costco Wholesale Corporation has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
★Costco Wholesale Corporation scores 96/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
★Free cash flow has grown at a 30.8% CAGR over the past 4 years, demonstrating strong earnings power growth.

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.

COST

⚠Gross margin of 12.9% is low, suggesting a competitive or commodity-like market with limited pricing power.
⚠Despite buyback spending, shares outstanding increased in 3 out of 4 years — stock-based compensation is offsetting repurchases.
⚠FCF yield of 1.6% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.

Key Valuation Metrics

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BAC

COST

Valuation

N/A

Free Cash Flow

$6.95B

N/A

FCF Yield

1.65%

13.95

Trailing P/E

47.98

11.13

Forward P/E

42.05

Quality & Moat

3.89%

ROIC

31.32%

10.64%

ROE

29.15%

0.00%

Gross Margin

12.88%

1.02

PEG Ratio

4.82

Balance Sheet Safety

N/A

Net Debt / Equity

Net cash

N/A

Interest Coverage

N/A

Net Debt / EBITDA

-0.07

1.97%

Dividend Yield

0.60%

BAC: 4Ties: 1COST: 3

BACCOST

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.

COST

$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

COST

$19.41

created per $1 retained over 3 years

Exceptional Value Creator

Σ Retained

$9.28B

Δ Market Cap

+$180.14B

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

57.9% Margin of Safety

Price is 57.9% below estimated fair value

Current Price: $56.20

Strongly undervalued

Undervalued

Fairly valued

Overvalued

Strongly overvalued

Fair Value: $133.45

Strongly undervalued

Undervalued

Fairly valued

Overvalued

Strongly overvalued

COST

110.9% Overvalued

Price is 110.9% above estimated fair value

Current Price: $951.45

Strongly undervalued

Fairly valued

Strongly overvalued

Fair Value: $451.13

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.

COST

What growth rate is the market pricing in at $951?

+20.7%

Market-Implied Owner Earnings Growth

Standard FCF implies +22.8%

The market implies +20.7% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +22.8%, 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.

COST

96/100

Wide Moat

70+ Wide · 40-69 Narrow · <40 None

Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.

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.

COST

-2.65

Unlikely Manipulator

Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Ownership Breakdown

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BAC

Insiders 7.3%Institutions 70.6%Retail & Other 22.0%

No. of Institutional Holders4,373

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.

COST

Insiders 0.2%Institutions 73.8%Retail & Other 26.0%

No. of Institutional Holders5,187

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

Buys (3M)

Buys (12M)

No open market insider purchases found.

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

COST

Buys (3M)

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

Sells (3M)

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

MENSAH BERNARD AMPONSAH

Officer

$3.66M

@ $39.80 · 2024-08-27

HANS LINDSAY D

Officer

$402,410

@ $36.91 · 2024-08-05

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

COST

Sells (3M)

Sells (12M)

Total value (12M): $18.18M

FRATES CATON

Officer

$695,100

@ $993.00 · 2026-04-01

ADAMO CLAUDINE

Officer

$732,205

@ $1003.02 · 2026-03-09

JONES TERESA A

Officer

$838,318

@ $986.26 · 2026-01-21

DECKER SUSAN LYNNE

Director

$437,390

@ $955.00 · 2026-01-16

KLAUER JAMES C

Officer

$1.41M

@ $939.00 · 2026-01-14

POLIT JAVIER

Officer

$2.26M

@ $866.38 · 2025-12-30

WILCOX WILLIAM RICHARD

Officer

$2.23M

@ $930.13 · 2025-11-07

ADAMO CLAUDINE

Officer

$2.53M

@ $935.68 · 2025-10-24

BARBRE TIFFANY MARIE

Divisional Officer

$1.16M

@ $934.91 · 2025-10-24

FRATES CATON

Officer

$1.40M

@ $910.02 · 2025-09-29

JONES TERESA A

Officer

$595,230

@ $992.05 · 2025-08-20

RUBANENKO YORAM B.

Officer

$3.90M

@ $974.96 · 2025-07-14

DECKER SUSAN LYNNE

Director

$536,058

@ $980.00 · 2025-06-18

CALLANS PATRICK J

Officer

$3.01M

@ $1002.77 · 2025-06-09

RIEL PIERRE

Officer

$2.03M

@ $1014.15 · 2025-06-06

KLAUER JAMES C

Officer

$3.92M

@ $981.07 · 2025-04-17

MILLERCHIP GARY

Officer

$1.03M

@ $940.01 · 2025-03-27

ADAMO CLAUDINE

Officer

$830,304

@ $922.56 · 2025-03-24

FRATES CATON

Officer

$765,213

@ $900.25 · 2025-03-18

VACHRIS ROLAND MICHAEL

Chief Executive Officer

$3.35M

@ $931.00 · 2025-03-11

GALANTI RICHARD ALAN

Officer and Director

$1.27M

@ $894.97 · 2024-10-24

JONES TERESA A

Officer

$717,236

@ $896.54 · 2024-10-23

RIEL PIERRE

Officer

$1.79M

@ $896.71 · 2024-10-15

CALLANS PATRICK J

Officer

$2.23M

@ $893.94 · 2024-09-30

ADAMO CLAUDINE

Officer

$2.84M

@ $888.99 · 2024-09-30

FRATES CATON

Officer

$1.50M

@ $883.35 · 2024-09-30

GALANTI RICHARD ALAN

Officer and Director

$868,962

@ $868.96 · 2024-08-15

DECKER SUSAN LYNNE

Director

$543,430

@ $876.50 · 2024-08-15

JONES TERESA A

Officer

$3,330

@ $832.50 · 2024-07-25

HINES DANIEL M

Officer

$2.54M

@ $846.37 · 2024-07-15

DENMAN KENNETH D

Director

$298,036

@ $851.53 · 2024-07-15

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

😏Greed(74/100)

"Market is optimistic — be cautious and ensure you have a margin of safety"

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.

COST

😐Neutral(52/100)

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

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: Greed (74)

COST

⚪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 (52)

View BAC Full Analysis View COST Full Analysis

Frequently Asked Questions: BAC vs COST

Is Bank of America Corporation or Costco Wholesale Corporation more undervalued in 2026?▼

Based on our discounted cash flow model, BAC trades at a 57.9% margin of safety (intrinsic value $133 vs. price $56), compared to COST's -110.9% margin of safety (intrinsic $451 vs. $951).

Which stock has a wider economic moat, Bank of America Corporation or Costco Wholesale Corporation?▼

BAC scores 100/100 (Wide moat), while COST scores 96/100 (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. COST scores 9.2 (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 Costco Wholesale Corporation?▼

COST earns 31.3% ROIC versus BAC's 3.9%. 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 Costco Wholesale Corporation's?▼

COST's dividend earns a safety score of 85/100 (Very Safe), compared to BAC's 79/100 (Safe). COST has raised its dividend for 0 consecutive years.