[Submission Date]
The Bank of America Corporation (BAC) is selected because it stands as the 11th largest organization by revenue in the world and 26th largest publicly held company in the United States by revenue. By assets, Bank of America Corporation (BAC) is the 2nd largest company in the United States. The Bank of America Corporation (BAC) is a multinational financial and banking organization which is selected for comparative analysis because its stock price per share has been appreciating since one year. Currently, the common stock of Bank of America Corporation (BAC) is being traded on the New York Stock Exchange (NYSE) for $22.74 per share with larger fluctuations in trading volume. This organization pays a dividend every quarter with the recent range of $0.05 to $0.75 per share.
The second publicly traded company chosen for comparative assessment is Stanley Black & Decker Incorporated that manufactures household hardware and industrial tools. Over a one-year period, the stock price per share for Stanley Black & Decker has been fluctuating within the average range of $123.64 and is currently being traded on the New York Stock Exchange (NYSE) at a price of $122.94 per share. Stanley Black & Decker pays quarterly cash dividend per share within the band of $0.55 to $0.58.
Ross Stores Incorporated is the third publicly traded company listed on NASDAQ stock exchange. In the United States, Ross Stores Incorporated is the second largest retailer after TJX Companies. From its stock price per share observations over a one-year period, it is found that the initial price per share for Ross Stores has been appreciating and being traded with $65.91 per share value. Ross Stores Incorporated currently pays $0.135 cash dividend against each share owned by equity investors.
Primary Rational for Company Selection
One primary rationale for which these three companies are selected is that they operate within the landscape of the United States. The selected belong to different sectors such as banking and financial, hardware as well as retail industry. All these publicly traded entities are holders of the major market share or leaders in their respective industries or sectors. The most prominent entity of the three is Bank of America that operates as a multinational firm.
The second reason for which the selected companies are compared with regards to their stock prices is that investors trading in their stocks would be able to derive capital gains. This is true because per share price for all three companies has been increasing over a period of one year .
Another reason for their selection concerns the investment portfolio theory of diversification. As the stock price per share of these companies tends to appreciate, investors holding these stocks of different industries or sectors can minimize or control the overall riskiness of their portfolio. Losses in one stock would be offset by a capital gain in prices of other common equity stocks. This way, risk-averse investors can not only earn capital gains but also control the risk internal to their portfolio .
The last reason for which companies are selected for comparative analysis with regards to prices is that these three publicly held companies tend to declare a cash dividend in every single quarter. Investors looking for holding an ownership in any company may not be selling the stock. Such investors have the primary investment objective of owning stocks, not for capital gains but to have their stake in any public company. Such investors can earn dividend gains as three companies have been in a consistent practice of dividend declaration.
References
Brigham, E. F., & Daves, P. R. (2012). Intermediate Financial Management. Cengage Learning.
Fried, G., DeSchriver, T. D., & Mondello, M. (2013). Sport Finance. Human Kinetics.
