Bank of America Corporation (BAC) vs ON Semiconductor Corporation (ON): 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%. ON is undervalued at $122, with an intrinsic value of $337 and a margin of safety of 64%. Of the two, ON has the wider margin of safety.
Rewards
- ★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 0.39 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
- ★Altman Z-Score of 4.70 indicates very low bankruptcy risk — the company is firmly in the safe zone.
Risks
- ⚠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.
- ⚠ROIC has declined by 17.0 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠FCF yield of 2.7% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Trailing P/E of 89.4x is 53% above the historical average of 58.6x — the stock trades at a premium to its own history.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →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.
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
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $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
Learn more →Reverse DCF — Market-Implied Growth
Learn more →Requires positive FCF to compute implied growth rate.
What growth rate is the market pricing in at $122?
The market implies +30.4% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +16.3%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Wide moat driven primarily by revenue predictability. Reinvestment Efficiency is the area most vulnerable to competitive pressure.
Narrow moat with roic consistency as the key competitive advantage. Improving margin stability would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
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.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is optimistic — be cautious and ensure you have a margin of safety"
"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
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: BAC vs ON
Is Bank of America Corporation or ON Semiconductor Corporation more undervalued in 2026?▼
Based on our discounted cash flow model, ON trades at a 63.9% margin of safety (intrinsic value $337 vs. price $122), compared to BAC's 57.9% margin of safety (intrinsic $133 vs. $56).
Which stock has a wider economic moat, Bank of America Corporation or ON Semiconductor Corporation?▼
BAC scores 100/100 (Wide moat), while ON scores 41/100 (Narrow 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. ON scores 4.7 (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 ON Semiconductor Corporation?▼
ON earns 8.3% 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.