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Bank of America Corporation (BAC) vs Zoetis Inc. (ZTS): 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%. ZTS is undervalued at $72, with an intrinsic value of $102 and a margin of safety of 29%. Of the two, BAC has the wider margin of safety.

BAC
Bank of America Corporation
$57.71
VS
ZTS
Zoetis Inc.
$72.11

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.
ZTS
  • ★Zoetis Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Gross margin of 71.7% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Zoetis Inc. scores 97/100 on the Economic Moat Score (Wide Moat), with roic consistency 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.
ZTS
  • ⚠FCF yield of 6.8% suggests reasonable valuation assuming continued moderate growth.
  • ⚠PEG ratio of 6.86 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
  • ⚠High leverage (2.41x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.

Key Valuation Metrics

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BAC
ZTS
Valuation
N/A
Free Cash Flow
$2.02B
N/A
FCF Yield
6.77%
13.33
Trailing P/E
11.76
10.91
Forward P/E
11.04
Quality & Moat
4.37%
ROIC
24.70%
11.20%
ROE
64.91%
0.00%
Gross Margin
71.74%
0.90
PEG Ratio
6.86
Balance Sheet Safety
N/A
Net Debt / Equity
2.41
N/A
Interest Coverage
N/A
N/A
Net Debt / EBITDA
1.86
2.21%
Dividend Yield
2.90%
BAC: 1Ties: 2ZTS: 5
BACZTS

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.

ZTS

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
ZTS
$-2.82
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$5.14B
Δ Market Cap
$-14.51B
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
59.4% Margin of Safety
Price is 59.4% below estimated fair value
Current Price: $57.71
Fair Value: $142.10
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
ZTS
29.0% Margin of Safety
Price is 29.0% below estimated fair value
Current Price: $72.11
Fair Value: $101.60
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.

ZTS

What growth rate is the market pricing in at $72?

+2.8%
Market-Implied Owner Earnings Growth
Standard FCF implies +6.7%

The market implies +2.8% Owner Earnings growth, below historical trends — potential opportunity.

Standard FCF implies a more demanding +6.7%, reflecting heavy growth investment expected to generate future returns.

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.
ZTS
97/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat with strength across all dimensions. ROIC Consistency 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.
ZTS
-2.47
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.
ZTS
Insiders 0.2%Institutions 100.1%
No. of Institutional Holders2,062
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
ZTS
0
Buys (3M)
3
Buys (12M)
Total value (12M): $886,367
BISARO PAUL M.
Director
$151,750
@ $75.88 · 2026-05-13
D AMELIO FRANK A
Director
$501,344
@ $75.39 · 2026-05-13
MCCALLISTER MICHAEL B
Director
$233,273
@ $77.76 · 2026-05-11
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
ZTS
0
Sells (3M)
1
Sells (12M)
Total value (12M): $2.54M
PECK KRISTIN C
Chief Executive Officer
$2.54M
@ $127.05 · 2026-02-17
LAGANO ROXANNE
Officer
$110,840
@ $170.00 · 2025-06-03
REED WILLIE M
Director
$201,029
@ $166.14 · 2025-03-11
LAGANO ROXANNE
Officer
$55,420
@ $170.00 · 2025-03-10
PECK KRISTIN C
Chief Executive Officer
$59,852
@ $156.68 · 2025-02-19
LAGANO ROXANNE
Officer
$55,805
@ $171.18 · 2025-02-11
POLZER ROBERT J
Officer
$617,028
@ $177.46 · 2024-11-25
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.
ZTS
FearGreed
😨Fear(30/100)

"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)
ZTS
⚪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 (30)
View BAC Full AnalysisView ZTS Full Analysis

Frequently Asked Questions: BAC vs ZTS

Is Bank of America Corporation or Zoetis Inc. more undervalued in 2026?▼

Based on our discounted cash flow model, BAC trades at a 59.4% margin of safety (intrinsic value $142 vs. price $58), compared to ZTS's 29.0% margin of safety (intrinsic $102 vs. $72).

Which stock has a wider economic moat, Bank of America Corporation or Zoetis Inc.?▼

BAC scores 100/100 (Wide moat), while ZTS scores 97/100 (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. ZTS scores 5.6 (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 Zoetis Inc.?▼

ZTS earns 24.7% 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 Zoetis Inc.'s?▼

ZTS's dividend earns a safety score of 94/100 (Very Safe), compared to BAC's 79/100 (Safe). ZTS has raised its dividend for 3 consecutive years.

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