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Bank of America Corporation (BAC) vs Lockheed Martin Corporation (LMT): Which Is the Better Buy in 2026?

As of 2026-09-17, BAC is undervalued at $58, with a DCF intrinsic value of $142 and a margin of safety of 59%. LMT is overvalued at $537, with an intrinsic value of $388 and a margin of safety of -38%. Of the two, BAC has the wider margin of safety.

BAC
Bank of America Corporation
$57.90
VS
LMT
Lockheed Martin Corporation
$537.25

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 0.90 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
LMT
  • ★Lockheed Martin Corporation has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Lockheed Martin Corporation scores 74/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
  • ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.

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.
LMT
  • ⚠Gross margin of 11.8% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠High leverage (1.91x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
  • ⚠Insiders have sold $3.6M worth of stock in the past 3 months — significant insider liquidation.

Key Valuation Metrics

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BAC
LMT
Valuation
N/A
Free Cash Flow
$5.56B
N/A
FCF Yield
4.49%
13.75
Trailing P/E
19.80
10.94
Forward P/E
16.40
Quality & Moat
4.37%
ROIC
24.82%
11.20%
ROE
89.17%
0.00%
Gross Margin
11.80%
0.90
PEG Ratio
1.01
Balance Sheet Safety
N/A
Net Debt / Equity
1.91
N/A
Interest Coverage
N/A
N/A
Net Debt / EBITDA
1.73
2.21%
Dividend Yield
2.57%
BAC: 3Ties: 1LMT: 4
BACLMT

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.

LMT

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
LMT
$-1.60
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$8.03B
Δ Market Cap
$-12.81B
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
59.3% Margin of Safety
Price is 59.3% below estimated fair value
Current Price: $57.90
Fair Value: $142.10
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
LMT
38.3% Overvalued
Price is 38.3% above estimated fair value
Current Price: $537.25
Fair Value: $388.39
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.

LMT

What growth rate is the market pricing in at $537?

+12.2%
Market-Implied Owner Earnings Growth
Standard FCF implies +10.9%

The market implies +12.2% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +10.9%, 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.
LMT
74/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat driven primarily by revenue predictability. Margin Stability 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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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.
LMT
-2.23
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 7.0%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.
LMT
Insiders 0.1%Institutions 76.7%Retail & Other 23.2%
No. of Institutional Holders3,304
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
LMT
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
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
LMT
2
Sells (3M)
6
Sells (12M)
Total value (12M): $13.88M
DONOVAN JOHN M
Director
$2.02M
@ $598.69 · 2026-08-13
LIGHTFOOT ROBERT M JR
Officer
$1.57M
@ $600.76 · 2026-08-12
CAHILL TIMOTHY S
Officer
$3.00M
@ $649.47 · 2026-03-11
ULMER GREGORY M
Officer
$1.87M
@ $658.08 · 2026-02-27
HILL STEPHANIE C
Officer
$1.59M
@ $660.64 · 2026-02-24
ST JOHN FRANK A
Chief Operating Officer
$3.83M
@ $491.04 · 2025-10-23
LIGHTFOOT ROBERT M JR
Officer
$1.42M
@ $442.42 · 2025-02-26
PAUL HARRY EDWARD III
Officer
$312,923
@ $442.61 · 2025-02-26
HILL STEPHANIE C
Officer
$2.12M
@ $442.51 · 2025-02-26
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
😐Neutral(52/100)

"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.
LMT
FearGreed
😐Neutral(44/100)

"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: Neutral (52)
LMT
⚪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 (44)
View BAC Full AnalysisView LMT Full Analysis

Frequently Asked Questions: BAC vs LMT

Is Bank of America Corporation or Lockheed Martin Corporation more undervalued in 2026?▼

Based on our discounted cash flow model, BAC trades at a 59.3% margin of safety (intrinsic value $142 vs. price $58), compared to LMT's -38.3% margin of safety (intrinsic $388 vs. $537).

Which stock has a wider economic moat, Bank of America Corporation or Lockheed Martin Corporation?▼

BAC scores 100/100 (Wide moat), while LMT scores 74/100 (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. LMT scores 3.3 (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 Lockheed Martin Corporation?▼

LMT earns 24.8% ROIC versus BAC's 4.4%. 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 Lockheed Martin Corporation's?▼

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