This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Banks Stocks That Trade at a Premium Over Wells Fargo (Update2)

Updated with closing stock prices.

NEW YORK ( TheStreet) -- Bank stocks have been rallying in 2012 as investors chase beaten down stocks on the hopes that they will surge the most if macro-economic concerns ease.

In fact, bank stocks have gained so much in recent months that the sector is no longer "fundamentally undervalued" according to KBW analysts.

When it comes to the blue-chip financial stocks, Wells Fargo (WFC - Get Report) enjoys the strongest valuations in the sector. The stock trades at 9.4 times its expected 2012 earnings per share and 172.6% of its tangible book value per share.

Wells Fargo's ROA has ranged between 1.11% and 1.27% over the past year, for the best and most consistent earnings performance among the "big four" U.S. bank holding companies. Its 2011 return on asset ratio of 1.28% is superior to that of JPMorgan Chase (JPM), which generated a 0.86% return.

Wells' strong earnings beat in the fourth quarter of 2011 also has analysts convinced that it deserves its strong premium. With a growing share in the mortgages business and strong capital that gives it the flexibility to raise dividends or make acquisitions, the stock is now the gold standard among the big bank stocks.

So which stocks trade at a premium to Wells Fargo? Such stocks should presumably hold an equally consistent track record in profitability, have strong capital flexibility and show an ability to grow organically as well through loan growth.

TheStreet shortlisted five stocks, using Highline FI, that trade at a premium to Wells Fargo both on a price-to-2012 earnings ratio basis as well as on a price-to-tangible book value basis. While some stocks have been standout performers in the crisis, not all stocks might be able to justify their premium.

The following are the five stocks ranked in the order of ascending price-to-tangible book value.
1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BBT $35.38 0.00%
EWBC $37.49 0.00%
MTB $118.32 0.00%
USB $42.69 0.00%
WFC $49.98 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs