BAC vs FNMA: Which Is the Better Buy in 2026?
Last updated August 2026
Short answer
BAC (Bank of America) and FNMA (Fannie Mae) share investment themes but are different businesses. The right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme.
BAC vs FNMA: the tie-breaker metrics
Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | BAC | FNMA | What it tells you |
|---|---|---|---|
| Forward P/E | 11.74 | ∞ | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 14.31 | 144.75 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 1.17 | 1.62 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 94% of range | 18% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
Before you buy: how BAC and FNMA affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. BAC and FNMA share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined BAC and FNMA exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does Bank of America (BAC) do?
Bank of America is the second-largest US bank by assets, behind JPMorgan Chase. The company is one of the four mega-bank holding companies (along with JPMorgan, Citigroup, and Wells Fargo) and operates across four main reporting segments. Consumer Banking is the largest retail bank in the US by deposits, serving over 60 million customers through ~3,800 branches. Global Wealth and Investment Management is one of the largest US wealth managers (anchored by Merrill Lynch). Global Banking provides commercial banking, treasury services, and investment banking to corporate and institutional clients. Global Markets provides trading services across fixed income, equities, and commodities.
What does Fannie Mae (FNMA) do?
Fannie Mae, formally the Federal National Mortgage Association, is a government-sponsored enterprise that sits at the center of the US housing finance system. It buys mortgages from lenders, packages them into mortgage-backed securities, and guarantees timely payment of principal and interest to investors, which keeps mortgage credit flowing and supports the 30-year fixed-rate loan. Fannie Mae does not originate loans directly; it makes most of its money from guaranty fees charged for taking on the credit risk of the loans it backs, earning a recurring stream across a guaranty book of business of roughly $4 trillion. The company reported full-year 2025 net income of about $14.4 billion and ended 2025 with net worth of about $109 billion, its fourteenth straight profitable year.
BAC vs FNMA: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- BAC drivers: Net interest income from deposit franchise; Investment banking and trading recovery.
- FNMA drivers: Recap-and-release thesis; Durable, fee-based core business.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Credit quality is the eternal bank risk; consumer and commercial credit losses cyclically. For FNMA, fNMA common is highly speculative and the risks are unusually severe.
BAC or FNMA: which should you pick?
BAC vs FNMA: the full fundamentals
BAC. BAC trades at a modest P/E typical of large US banks. The valuation balances the durable consumer deposit franchise and capital markets recovery against credit cycle uncertainty and regulatory capital requirements. Price-to-book around 1.1x is consistent with ROE around 10%.
FNMA. FNMA common is unusual to value with normal metrics. Even though Fannie Mae earns billions and holds more than $100 billion of net worth, almost none of that currently accrues to common holders: Treasury sits ahead of them with senior preferred stock whose liquidation preference exceeds $200 billion, and it holds warrants for about 79.9% of the common. The roughly $8 billion market cap is therefore not a claim on current earnings or book value but a market-implied probability that the company exits conservatorship on terms that leave value for the common after Treasury's stake is satisfied. Standard price-to-earnings or price-to-book analysis does not capture this; the price is effectively pricing a political and legal outcome.
Headline figures (approximate, early 2026): BAC shows revenue (ttm) ~$100 billion, net income (ttm) ~$28 billion, eps (ttm) ~$3.50, p/e (ttm) ~13x; FNMA shows net income (fy2025) ~$14.4 billion, net income (q1 2026) ~$3.7 billion, net worth ~$109B (end 2025); ~$112.7B (Q1 2026), treasury senior preferred Liquidation preference well over $200 billion and growing.
The bottom line: BAC vs FNMA
BAC and FNMA are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined BAC and FNMA exposure against your real portfolio. It is not an investment adviser.
Wondering how BAC or FNMA fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in Bank of America with AI
Connect the broker you already use and ask Walnut's AI how BAC fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between BAC and FNMA?
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Bank of America is the second-largest US bank by assets, behind JPMorgan Chase. Fannie Mae, formally the Federal National Mortgage Association, is a government-sponsored enterprise that sits at the center of the US housing finance system. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is BAC or FNMA the better stock?
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Neither is universally better; they suit different views and risk levels. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, BAC or FNMA?
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A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both BAC and FNMA?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of BAC vs FNMA?
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BAC: Credit quality is the eternal bank risk; consumer and commercial credit losses cyclically. Interest rate cycles affect net interest income materially. Regulatory capital requirements can constrain capital return. FNMA: FNMA common is highly speculative and the risks are unusually severe. The US Treasury effectively controls the company through senior preferred stock with a liquidation preference well over $200 billion and warrants for about 79.9% of the common stock, so exercising those warrants or converting the senior preferred in a recapitalization could massively dilute existing common shareholders, potentially leaving them with little. The entire thesis is dependent on political and regulatory decisions, an IPO, a relisting, and the treatment of Treasury's stake, none of which are within the company's control and all of which can change with administrations. There is extensive litigation history around the profit sweep and shareholder rights. The shares trade over the counter rather than on a major exchange, which can mean lower liquidity and wider spreads, and prices have swung more than 30% in a year on shifting expectations. Investors can lose most or all of their capital if a release never happens on favorable terms.
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Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell BAC or FNMA; figures are approximate and dated (as of August 2026). Verify current data before investing.