Over the past few weeks, the market has seen an influx of impressive earnings reports from some of the nation’s largest banks. The solid numbers coming out of the banking sector are good news for the industry as a whole, but some banks have emerged as the best of the best.

In an effort to help investors make the best pick in a bullish banking market, we’ve pinned industry leaders Bank of America ( BAC) and Citrgroup (C) against each other. Using all of the most recent available data, we’ll attempt to identify which stock is the strongest at the moment.

Recent Earnings Performance

Both Bank of America and Citigroup announced their latest earnings reports recently, giving us a good sense the current health of these companies. Interestingly enough, both of these companies were able to beat the Zacks Consensus Estimate for earnings per share, so there isn’t a clear-cut winner here (also read Bank Stock Roundup: Q2 Earnings ).

Bank of America posted an EPS of $0.45, which beat the Zacks Consensus Estimate of $0.36. The company beat our expectations by 25%, which is consistent with its average earnings beat of 27.56% over the past four quarters.

Citgroup also surpassed the Zacks Consensus Estimate of $1.35, reporting an EPS of $1.45. This represented an earnings beat of 7.41%. However, unlike Bank of America, Citigroup has posted an average earnings miss of 3.47% over the last 4 quarters.

While earnings beats by both of these companies should make investors pleased, Bank of America slightly edges out Citigroup based on the magnitude of its most recent beats, as well as the magnitude of its beats over the last 4 quarters.

Earnings Estimate Revision Activity

Another example of the strength of these two stocks is in the recent earnings estimate revision activity. Currently, the Zacks Consensus Estimate for yearly EPS is higher than it was a month ago for both of these companies, indicating that analysts are getting more bullish on Bank of America and Citigroup.

30 days ago, the Zacks Consensus Estimate for Bank of America’s yearly EPS was $1.35, and now it sits at $1.41. In the same time, the Zacks Consensus Estimate for Citigroup has risen from $5.43 to $5.58. These numbers could be a good sign for the long-term prospects of both companies.

Again, Bank of America has the slight edge based on the magnitude of these revisions, but the line here is even thinner, making this head-to-head almost too close to call.

Everything in Between

One area where Bank of America has been able to pull away from Citigroup is reducing its recent litigation costs. Overall, the banking industry has been spending less on legal fees and fines, but Citigroup has been hit with some heavy costs recently. The company will soon have to refund over $700 million to customers victimized by illegal credit card practices. This is in addition to a recent fine of $140 million paid to end a probe into Citigroup’s subsidiary Banamex.

Another thing that pushes Bank of America in front is its dividend payouts. While both companies pay out a dividend of $0.20 per share, this is 1.12% of BAC’s share price, while Citigroups payout isn’t even a half of a percent. For investors with a focus on dividends, this could be what boosts Bank of America definitively above Citigroup.

Currently, both companies hold a Zacks Rank #2 (Buy), after recently being upgraded from a Zacks Rank #3 (Hold) within the past week. They also both belong to an industry that holds a Zacks Industry Rank in the top 28%, and a lot of the internal numbers should make investors feel comfortable going forward. In a head to head competition, Bank of America and Citigroup are very close, with BAC just edging it out in some of the key categories. However, both companies could be poised for success in the near future and investors should keep note of their stock going forward.

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CITIGROUP INC (C): Free Stock Analysis Report
 
BANK OF AMER CP (BAC): Free Stock Analysis Report
 
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