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Bank of America Corporation (BAC) vs Microchip Technology Incorporated (MCHP): 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%. MCHP is undervalued at $71, with an intrinsic value of $169 and a margin of safety of 58%. Of the two, BAC has the wider margin of safety.

BAC
Bank of America Corporation
$57.59
VS
MCHP
Microchip Technology Incorporated
$71.02

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.
MCHP
  • ★Gross margin of 60.2% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Management has timed buybacks well — 2 out of 3 years showed value-accretive repurchases.
  • ★PEG ratio of 0.21 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings 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.
MCHP
  • ⚠ROIC has declined by 14.7 percentage points over the past 4 years, which may signal competitive erosion.
  • ⚠Microchip Technology Incorporated scores only 28/100 on the Economic Moat Score, suggesting limited durable competitive advantages.
  • ⚠Free cash flow has declined at a 34.7% CAGR over the past 4 years — a concerning trend.

Key Valuation Metrics

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BAC
MCHP
Valuation
N/A
Free Cash Flow
$1.36B
N/A
FCF Yield
3.54%
13.30
Trailing P/E
107.61
10.88
Forward P/E
15.56
Quality & Moat
4.37%
ROIC
8.18%
11.20%
ROE
7.19%
0.00%
Gross Margin
60.19%
0.90
PEG Ratio
0.21
Balance Sheet Safety
N/A
Net Debt / Equity
0.79
N/A
Interest Coverage
N/A
N/A
Net Debt / EBITDA
3.40
2.21%
Dividend Yield
2.62%
BAC: 3Ties: 1MCHP: 4
BACMCHP

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.

MCHP

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
MCHP
N/A
Net losses over 3 years — test not applicable
Company had negative cumulative retained earnings
Σ Retained
$-843.3M
Δ Market Cap
$-10.69B
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
59.5% 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
MCHP
10.6% Margin of Safety
Price is 10.6% below estimated fair value
Current Price: $71.02
Fair Value: $79.43
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.

MCHP

What growth rate is the market pricing in at $71?

+20.9%
Market-Implied Owner Earnings Growth
Standard FCF implies +14.1%

The market implies +20.9% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +14.1%, 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.
MCHP
28/100
No Moat
70+ Wide · 40-69 Narrow · <40 None

No durable moat detected, though reinvestment efficiency 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.

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.
MCHP
-2.85
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone
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.
MCHP
Insiders 1.8%Institutions 102.6%
No. of Institutional Holders1,750
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
MCHP
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
MCHP
0
Sells (3M)
5
Sells (12M)
Total value (12M): $3.40M
CHAPMAN MATTHEW W
Director
$292,546
@ $97.52 · 2026-05-28
CHAPMAN MATTHEW W
Director
$954,799
@ $95.48 · 2026-05-15
BUNKER MATHEW B.
Officer
$1.02M
@ $96.88 · 2026-05-13
KRAWCZYK JOSEPH R. II
Officer
$345,743
@ $78.58 · 2026-02-12
BUNKER MATHEW B.
Officer
$783,700
@ $78.37 · 2026-02-12
CHAPMAN MATTHEW W
Director
$682,550
@ $68.25 · 2025-08-25
JOHNSON KARLTON D
Director
$29,981
@ $60.69 · 2025-05-20
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(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.
MCHP
FearGreed
😨Fear(34/100)

"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.

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 (53)
MCHP
⚪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 (34)
View BAC Full AnalysisView MCHP Full Analysis

Frequently Asked Questions: BAC vs MCHP

Is Bank of America Corporation or Microchip Technology Incorporated 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 MCHP's 58.0% margin of safety (intrinsic $169 vs. $71).

Which stock has a wider economic moat, Bank of America Corporation or Microchip Technology Incorporated?▼

BAC scores 100/100 (Wide moat), while MCHP scores 28/100 (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. MCHP scores 3.9 (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 Microchip Technology Incorporated?▼

MCHP earns 8.2% 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 Microchip Technology Incorporated's?▼

BAC's dividend earns a safety score of 79/100 (Safe), compared to MCHP's 24/100 (Unsafe). BAC has raised its dividend for 3 consecutive years.

BAC vs MCHP: Which Is the Better Buy in 2026? | SafetyMargin.io