Bank of America or Wells Fargo: Which Mega-Cap Delivers Better Returns?

Retirement investors weighing Bank of America (NYSE: BAC) against Wells Fargo (NYSE: WFC) look a deceptively akin scorecard astatine the apical of the expert page: some megabanks transportation a Buy consensus, and some task meaningful upside from existent levels. So which belongs successful a status portfolio close now? The header numbers look close, but the condemnation down them, and the income, valuation, and hazard profiles underneath, constituent to a wide victor for antithetic capitalist types.

Start with the price-target scorecard. BofA trades astatine $57.88 against an expert people of $63.70. Wells Fargo trades astatine $83.86 against a people of $96.30. Analysts connected mean urge buying shares of each, but they diverge connected conviction. While BofA has near-unanimous bullish coverage, Wells Fargo has notably much analysts sitting connected the fence.

Dimension 1: Yield and Capital Return

Wells Fargo pays a $0.45 quarterly dividend, yielding 2.2%, versus Bank of America's $0.28 quarterly payout astatine a 1.9% yield. Yet the buyback spread reverses the picture. Wells Fargo returned $23 cardinal to shareholders successful 2025, including $18 cardinal successful buybacks, and raised its dividend 13%. BofA returned astir $30 cardinal successful 2025 and had an 8% mid-year dividend hike. BofA is returning importantly much currency to shareholders, making it the decisive victor for income-focused retirees seeking full superior return.

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Dimension 2: Valuation

Wells Fargo trades astatine a trailing P/E of 13 connected TTM EPS of $6.47, versus BofA astatine 14 connected TTM EPS of $4.03. Forward multiples are astir identical astatine astir 12, but the underlying catalyst supports a much charismatic valuation for Wells Fargo. The Federal Reserve plus headdress was removed successful Q2 2025, allowing unrestricted equilibrium expanse maturation for the archetypal clip successful years. Management raised its medium-term ROTCE people to 17% to 18%, up from 15%. Investors are frankincense paying a little aggregate for a structurally improving franchise. Wells Fargo is the winner.