Bank of America Corp (NYSE:BAC) has been a stellar performer over the past seven years. From $6/share as recently as early 2012, Bank of America stock has launched upward. With the stock around $30 now, anyone holding since then is sitting on a quintuple. Even since the 2016 low around $13, the stock has more than doubled.

Recently, however, BAC stock has lost its momentum. The stock first ticked up to the $30 level this past December. It hit $33 earlier this year. It’s now back under $30. Have the past six months just been a pause? Or is Bank of America’s bullish trend over?

On the bearish side, the banking reform bill did little for Bank of America stock. And the effect of the tax cut will wear off with time. To Bank of America’s credit, however, it is returning tons of money to shareholders while boosting profitability strongly.

Bank of America Stock Cons

Recent Banking Bill Didn’t Do Much: The recent legislation that reformed the banking system did little to help the big banks. Notably, it left the deeply unpopular Consumer Financial Protection Bureau as it was. Banks such as Wells Fargo & Co (NYSE:WFC) that have run into trouble with regulators were certainly hoping for a softer regulatory touch going forward.

Instead, the banking bill that Trump just signed mostly helps smaller banks. For example, it raised the too-big-to-fail threshold from $50 billion on upward. That allows mid-sized banks that had been stuck at the $50 billion limit such as New York Community Bancorp (NYSE:NYCB) to expand dramatically without taking on more regulatory compliance costs.

In a way, this hurts the already huge banks, since mid-sized competitors now have the green light to aggressively try to take market share again.

Low Dividend: Traditionally, investors bought bank stocks for their attractive and stable dividend yields. Then 2008 happened. During the Great Financial Crisis, almost all the large national banks had to slash their dividends or eliminate them entirely.

Even a decade removed from the crisis, those dividends have hardly recovered. Bank of America stock, in particular, was paying 64 cents per quarter prior to the crisis. It slashed that to a mere penny at the depths of the crisis. The dividend has now recovered to 12 cents, but that’s still less than 20% of its pre-crisis yield. Moreover, it adds up to just a 1.6% dividend yield on today’s $30 price.

One alternative, if you’d like to stick with Bank of America, however, is to turn to their preferred stock shares. These lack the upside of the common stock, but pay a far higher dividend. They also tend to decline far less during bear markets and other events that would topple BAC common stock.

With a price around $26.50, for example, the BAC 6.5% preferred stock series Y is currently yielding 6.1% to maturity. That’s nearly quadruple the yield of regular Bank of America stock.

Late In The Economic Cycle: Bulls have been applauding higher interest rates ever since Trump won the election in 2016. However, there’s a dark side to higher rates.

We’re already in year nine of the economic recovery. Unemployment is hitting historic lows. Things can’t get much better on the economic outlook front. And we’re seeing weakness in significant chunks of the consumer credit market, such as auto loans.

All told, there’s probably a good reason why long-term interest rates aren’t going up nearly as quickly as the Fed is hiking on the short end; investors are worried that rising rates will tip the economy over into a recession. It’s a valid concern, and Bank of America, along with other banks, would tumble once economic growth goes negative.

BAC Stock Pros

High Shareholder Yield: While Bank of America stock doesn’t pay much of a dividend, the company is being increasingly generous with its cash. It’s just that management is doing so mostly via share buybacks. That runs contrary to the usual banking pattern, where shareholders could count on generous dividends.

Regardless, it still returns profits back to shareholders. Since 2015, Bank of America has boosted its net payout ratio, the combined dividend yield and share buyback percentage, from less than 2% then to greater than 6% now.

Bank of America, which had previously badly trailed its too-big-to-fail-rivals, has now caught up to the likes of JP Morgan (NYSE:JPM) and U.S. Bancorp (NYSE:USB) on this key metric.

Increasing Market Volatility: Since February 2016, markets have been really boring. Not just the US stock market, but most assets. Interest rates have gone up, but until recently, it was in a modest and constrained way. Currencies have been quiet. Foreign markets have also been placid.

That’s all bad news for investment banking operations. Companies like Bank of America profit off of elevated levels of market gyrations. Thus, 2018 is shaping up more favorably. US markets tanked in February and have remained more unsteady since then, offering Bank of America opportunity to profit.

In the credit market, interest rate swings are becoming increasingly wild. And overseas, from Argentina and Brazil to Turkey, we’re seeing big shocks. All this spells opportunity for a solid investment banking operation.

Significantly Rising Profitability: Bank of America’s management team has done a great job controlling expenses. Since the Great Financial Crisis, they’ve managed to reduce their workforce dramatically without hitting the bank’s overall operations. The lean mean machine continued to deliver strong results this past quarter.

For Q1 2018, Bank of America improved on key metrics versus the same quarter in 2017. Its efficiency ratio jumped from 63% to 60% (like golf, lower is better). Generally, the threshold for a great bank is to be at 50% or less. So, while Bank of America isn’t near there yet, that means that there’s still room for improvement.

On a return on assets basis, BAC surged from 0.97% to 1.21%. Return on equity soared from 8.1% to 10.8%. Generally, 0.75% and 8.0% are considered average for US banks on those metrics, respectively, so Bank of America is well ahead of the median. In any case, all profitability metrics are moving strongly in the correct direction.

Bank of America Stock Verdict

I could take or leave Bank of America stock here. I’ve never been a big fan of the too-big-to-fail U.S. banks. The smaller regional banks generally have less risk and pay higher dividends.

That said, Bank of America deserves a lot of credit for recovering from a near-fatal blow in 2008. Management is taking the right steps. Profitability is way up, and management is reining in risk. Is that enough to make BAC stock a buy? I see better value elsewhere, but BAC stock is a decent hold, and worth a look to buy on a further dip.

At the time of this writing, the author owned NYCB stock. You can reach him on Twitter at @irbezek.