Bank of America Has Cut Its Share Count by Nearly a Third in 10 Years. $10,000 Invested Then Is Worth About $40,000 Now.

Bank of America, the second-largest financial services institution in the U.S. with $3.4 trillion in assets, has been consistently profitable due to its substantial scale and strong industry positions. Over the past decade, the bank has reduced its outstanding share count by nearly a third, amounting to 6.9 million shares, a 32% decrease from ten years ago.

This share reduction has resulted in diluted earnings per share rising by 122% during this period. In 2026, the company has bought back a total of $19.2 billion of stock, equaling 5.2% of its market cap.

In the most recent quarter, Bank of America spent $6 billion on stock buybacks, contributing to a healthy dividend yield of 2.45%. This is significantly higher than the S&P 500 index's yield of 1.05%. Dividends have increased by a remarkable 327% during the same period, going from $0.075 in Q3 2016 to $0.32 in the latest quarter. Over ten years, the stock has generated a total return of 304%, which would have grown a $10,000 investment into $40,400.

Despite not matching the overall stock market's 328% return, Bank of America's performance is still respectable. The bank's success can be attributed to management's effective capital allocation policy, which includes reinvesting in the business, engaging in mergers and acquisitions, or paying down debt, as well as returning capital to investors through buybacks and dividends. Warren Buffett and Berkshire Hathaway own 6.9% of the bank, further endorsing its strong position.

Currently, Bank of America is trading 19% below its peak, resulting in a lower valuation multiple of 12.5 compared to its 10-year average of 13.1. This provides an opportunity for investors to buy shares at a more attractive price-to-earnings ratio.